Recovering unpaid debts can be a complex and time-sensitive process, whether you’re dealing with unpaid invoices from individuals, businesses, or international clients.
The First Step: Letter Before Action (LBA)
Every debt recovery process begins with a Letter Before Action (LBA). This formal notice is a requirement before legal proceedings can begin and gives the debtor an opportunity to settle the matter before court involvement.
- Individuals are given 28 days to respond.
- UK-based businesses are given 14 days to respond.
- International debtors are given 21 days to respond.
This initial communication often results in prompt payment, especially when debtors understand that court action may follow.
No Response to LBA?
If the debtor fails to respond within the specified timeframe, we consult with the client to decide the next steps. Typically, this involves issuing a Claim in order to obtain a County Court Judgment (CCJ). A CCJ is a legally binding court order requiring the debtor to repay the money owed.
The decision to issue a claim is always down to the client — we provide advice based on experience, but the client remains in control throughout the process.
Enforcing a Judgment
Once a CCJ is obtained, and if the debt remains unpaid, the client is advised on various enforcement options. These may include instructing High Court Enforcement Officers, securing charging orders against property, or applying for third-party debt orders — each method is suited to different circumstances.
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- Statutory Interest (Individuals and non-contractual claims): Under Section 69 of the County Courts Act 1984, you can typically claim interest at a rate of 8% per annum.
- Commercial Interest: For business-to-business transactions, the Late Payment of Commercial Debts (Interest) Act 1998 allows for interest at 8% above the Bank of England base rate, plus fixed compensation and reasonable recovery costs.
