Recover debts owed to you
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.
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 for the debt
- a date when 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
You should 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 around £50.oo an 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 an amount of the money they recover on your behalf.
It's possible the agency might 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:
Where the value of the claim does not exceed £3000, you can make a claim online using the Small Claims service.