A Step-by-Step Guide to the UK Debt Recovery Process

Almy & Thomas Solicitors • 23 November 2023

If you’re having trouble reclaiming unpaid debts, it can be incredibly frustrating and easy to feel as though there’s no simple solution. However, the reality is that there are many robust debt recovery laws in place that empower you to demand repayment in a fair and legal manner. With this in mind, when you consult with a civil litigation solicitor, these are the steps you can expect them to take to help you retrieve any outstanding dues.


The Four Steps of Debt Recovery

1.  Letter Before Action

Before any legal proceedings can be issued, debt recovery laws require creditors to give their debtor reasonable opportunity to pay. A Letter Before Action (LBA) is a formal letter which sets out the following terms:

 

●     What your debtor owes you

●     How long your debtor has to pay (typically between 1-2 weeks)

●     Your right to charge statutory interest on debts

●     The next course of action if the debtor still refuses to pay

 

If the debtor still doesn’t make a payment or give a good enough reason for a late payment, you can also issue a statutory demand, which gives the debtor 21 days to pay before legal action is taken.


2.  Legal Action

If no acceptable reply is received, the next step is to take legal action by issuing court proceedings at the County Court. At this stage, the debtor will receive a court form which demands them to pay the debt (with interest) within 14 days. If it’s a commercial debt, Late Payment of Commercial Debts (Interest) Act 1998 will also apply.

 

Alternatively, if the debtor is an individual, you can apply for bankruptcy proceedings to make the debtor bankrupt. This will impact their ability to obtain credit or become a company director.


3.  Judgement

A County Court Judgement (CCJ) is a court order that confirms the debtor is liable to pay your debt. As soon as the previous court claim has expired, you can proceed to obtaining a CCJ, which enables you to take enforcement action against the debtor to recover the debt owed to you. The CCJ is also placed on record against the debtor, which impacts their eligibility to obtain credit, as well as their credit worthiness.


4.  Enforcement

As soon as the CCJ has been obtained, a solicitor is then able to immediately ‘enforce’ the debt. There are a number of ways to enforce the debt recovery, such as attachment of earnings or charging orders. However, the most common method is to instruct a bailiff or high court enforcement officer to visit the debtor’s address and either collect the debt or seize goods to the value of the debt. Of course, your civil litigation solicitor will advise you on the best course of action depending on your individual circumstances.


Seeking Legal Advice for Dispute Resolution?

If you are embroiled in a commercial contract dispute, require debt recovery or have a partnership or company dispute, then you need the services of an experienced civil litigation solicitor. Since 1920, Almy & Thomas Solicitors has been standing up for the rights of small businesses and individuals involved in civil litigation cases. Our team will make certain that your interests are fully protected. We work with clients throughout Torquay, Torbay, Newton Abbot and South Devon, so get in touch today.

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