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Recover debts owed to you - a guide

If a person or company owes you money and won't pay, there are ways of recovering the debt. The action you take will depend on the size of the debt and your ability to prove that you are owed the money. Find out how to recover a debt owed to you.

Contacting the person or company who owes you money

Speak to the person who owes you money. You may be able to informally agree a plan to get the money repaid.

If that doesn’t work, you can write a letter. Tell them:

  • how much they owe
  • what it’s for
  • what you have already done to try to get the money

It's important to include information like:

  • who's involved - the name and address of both you and the person who owes you money
  • dated copies of all paperwork relating to the debt
  • a date by which you expect payment (at least seven days)
  • a request for the debtor to put in writing any issue or dispute they have with your statement
  • details of the steps you'll take if payment isn't received

Avoid:

  • being drawn into heated arguments or lengthy correspondence
  • threatening legal action that you're not prepared to follow up

Using mediation to settle a debt dispute

If you are unable to come to an agreement over the debt, you can get help negotiating a solution using a mediation service.

In mediation, someone from a mediation service helps two sides find a solution to a dispute. It can be quicker, cheaper and less stressful than going to court.

The court will expect you to try to solve the dispute through negotiation or mediation before going to court.

If mediation doesn’t work, you can still take a case to court.

Using a solicitor

If you’re not able to come to an agreement, it can be helpful to discuss your case with a solicitor who's experienced in debt recovery.

For a fee, they can write a letter to the person who owes you money. The letter can tell them that legal action may be taken if they don't pay. A solicitor's letter can produce quick results.

Talking with a solicitor can also help define your case in legal terms and help identify further action that may be available to you.

Sometimes solicitors will work to a fixed fee. If they are charging an hourly rate, this is usually no less than £50 per hour.

Using a debt recovery agency

Some companies specialise in debt recovery and will employ a solicitor to take legal action to recover your debt. They may charge a fixed fee or take a percentage of the money they recover on your behalf.

You should also bear in mind that they may not use legally trained staff.

Recovering debts through the courts

If you can't settle the matter in any other way, you may want to make a claim in court. This is normally used as a last resort. It's a good idea to seek independent legal advice first.

It's important to remember that:

  • it can take months for a case to go to court
  • there’s no guarantee you’ll win the case
  • you may have to pay the other side’s costs if you lose the case
  • if the other side can’t pay (for example, they’re bankrupt or not working), it will be hard to get money back

If win your case, you may have to apply to the Enforcement of Judgments Office EJO) to ask them to try to recover the money on your behalf, as the court won’t enforce a judgment.  There are further fees that the EJO will charge you to enforce your judgment.  You can find out more information by contacting the EJO at postroomejo@courtsni.gov.uk.

Claiming online

Where the value of the claim does not exceed £3000, you can make a claim online at the Courts and Tribunals Service website using the Small Claims Online service.

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