Unpaid debts are more than just an inconvenience—they can choke cash flow, derail business growth, and cause unnecessary stress for individuals and companies alike. In the UK, debt recovery is governed by strict procedures, designed both to protect creditors and ensure debtors are treated fairly. Understanding the process in detail gives you the power to act decisively and lawfully.

This guide explains each stage of debt recovery, from the first demand letter through to court enforcement, highlighting your legal options, potential costs, and timeframes. Whether you are a business owner chasing unpaid invoices or an individual owed money under a private agreement, this is your complete roadmap to reclaiming what is rightfully yours.

Debt recovery is the legal process of pursuing money owed to you under a contract, loan, invoice, or other financial arrangement. The creditor (the person or company owed money) may begin recovery when informal reminders fail.

Debt recovery in England and Wales is primarily governed by the Civil Procedure Rules (CPR), which require creditors to act reasonably and proportionately. Special rules apply when pursuing individuals or sole traders under the Pre-Action Protocol for Debt Claims (2017), which obliges creditors to provide extensive information before court action.

Delay in pursuing a debt can reduce your chances of recovery. Debtors may dispose of assets, enter insolvency, or simply become harder to trace. Prompt action also shows you are serious and discourages debtors from ignoring you.

Time limits apply: under the Limitation Act 1980, most debts must be pursued within six years of becoming due (twelve years for some specialty debts, e.g., under a deed). After this, they may become statute-barred.

(a) Informal Contact

Before formal action, many creditors send reminders by letter, email, or phone. Often, debtors respond once the seriousness is made clear.

(b) Letter Before Action (LBA)

If informal contact fails, the next step is an LBA. This is a formal letter setting out:

• The amount owed.

• Legal basis for the claim.

• Interest and charges being sought.

• A deadline for payment (typically 14–30 days).

For individuals/sole traders, the Pre-Action Protocol requires even more: a statement of account, copies of contracts, information sheets, and response forms. Failure to comply can lead to costs penalties later.

(c) Issuing a County Court Claim

If the debtor ignores the LBA, you may issue proceedings in the County Court. Claims under £100,000 are usually issued via the County Court Money Claims Centre (CCMCC) or Money Claim Online (MCOL).

Court fees apply, ranging from £35 for debts under £300 to 5% of the claim for higher sums.

The debtor has:

• 14 days to respond or acknowledge service.

• 28 days to file a defence if they contest the debt.

(d) County Court Judgment (CCJ)

If the debtor fails to respond, you may request a default judgment. If they defend, the matter may proceed to a hearing.

A CCJ is a binding court order. Failure to pay damages credit records for six years and opens the door to enforcement.

(e) Enforcement Options

If the debtor still does not pay, you may enforce the CCJ. Options include:

• Bailiffs or High Court Enforcement Officers (HCEOs): seize goods to sell.

• Attachment of Earnings Orders: deduct sums from debtor’s salary.

• Charging Orders: secure the debt against property.

• Third Party Debt Orders: freeze and recover funds from bank accounts.

• Insolvency Proceedings: serve a statutory demand and potentially petition for bankruptcy/winding up (for debts over £5,000 for individuals, £750 for companies).

Court is not always the best path. Alternatives include:

• Negotiated repayment plans.

• Mediation (cheaper, quicker, confidential).

• Arbitration (particularly for commercial disputes).

Court fees and solicitors’ costs vary. In higher-value claims, costs may be recoverable from the debtor, but in the Small Claims Track (debts under £10,000), costs recovery is limited. Always weigh costs against the likelihood of recovery.

• Keep contracts and records in writing.

• Act quickly once payments fall overdue.

• Send a properly drafted Letter Before Action.

• Choose the most effective enforcement method based on debtor’s assets.

Debt recovery in the UK is a structured, rules-driven process that requires both speed and precision. From sending an LBA to enforcing a CCJ, creditors have powerful tools at their disposal. However, each stage must be handled carefully to maximise recovery and avoid wasted costs.