Solicitors will tell you that starting legal proceedings should always be the final option in a debt recovery dispute. That's because there are a few important stages to go through first in order to get your money.
Perhaps the most important is the letter before action, also known as an LBA. This is a document that acts to jolt a debtor into a feeling that time has finally run out. In ideal circumstances an LBA will secure payment, but even if it doesn't, it will help your case by showing you took all reasonable steps to avoid going to court.
Importantly, a well written LBA will contain a number of details that give the debtor no room for manoeuvre. To help you craft a winning LBA we've compiled a list of 12 things to include. Here they are:
By including these 12 important points you should be able to construct an LBA that ticks all the right boxes for successful debt recovery.
Alternatively, your solicitor may be able to send an LBA on your behalf. Another option is to use our LBA template to ensure you don't leave anything to chance.
Perhaps the most important is the letter before action, also known as an LBA. This is a document that acts to jolt a debtor into a feeling that time has finally run out. In ideal circumstances an LBA will secure payment, but even if it doesn't, it will help your case by showing you took all reasonable steps to avoid going to court.
Importantly, a well written LBA will contain a number of details that give the debtor no room for manoeuvre. To help you craft a winning LBA we've compiled a list of 12 things to include. Here they are:
1) Ensure you use the correct address, so the debtor cannot deny receiving the LBA
Using the wrong address on your LBA is a bit of a schoolboy error. By doing this you could inadvertently give the debtor more time to sit on the issue, delaying that all important debt recovery success.2) If sending an LBA by email, always get a delivery and read receipt to evidence the correspondence
If a claim does end up in court you want to be able to show that you did everything you could. A delivery and read receipt means your opponent can't deny receiving your LBA.3) Use a reference code that easily identifies you and relates to your admin system
By using reference codes you can show clearly the matter to which your LBA refers. This will prevent the respondent asserting that he or she reasonably believed it referred to another matter.4) If you can, always use a reference that relates to you within the debtor's admin system if you have one
If you have a reference on the debtor's admin system then definitely include it in your LBA. Once again, this will prevent assertions by the respondent that he or she thought it referred to another matter.5) Be certain that you use the correct date
You would be amazed at how often it happens and it will definitely let you down your LBA. For example, if a typing error means the date on the LBA is in the future it gives the debtor the opportunity to ignore you.6) Make it absolutely clear that your aim is debt recovery
It might seem obvious to you that your aim is debt recovery, but ambiguities can creep in. Therefore never refer vaguely to 'the outstanding matter', for example. Instead of that state clearly that your letter is an LBA that relates to a claim for debt recovery.7) Always specify the exact amount that is outstanding
Again, this might sound obvious, but you have to cover all bases to ensure the claim can't be defended successfully. Try putting the amount owed in large, bold type so that nobody can dispute the value of your claim.8) Notify how the debtor can contact you in case the amount owed is disputed
This is important because once again it shows that you have acted reasonably. If the debtor, having received the LBA, fails to contact you to clarify the amount owing a court is likely to infer that the amount is not in dispute.9) Include a payment deadline and explain the consequences of failing to pay
Including a payment deadline and explaining the probable consequences shows you in a good light.10) Also include any details of additional debt recovery fees, interest or compensation
If you are claiming for associated costs, then you should make this clear in your LBA. Courts won't look favourably upon you if it looks like you are seeking to 'ambush' the defendant on the day.11) Remind the debtor that any CCJ, if issued, will affect their credit rating
This is a useful tactic in prompting the debtor to pay immediately in order to stave off court proceedings.12) Specify how and where the payment should be made
Of course, the debtor will need to know exactly how and where he or she should make payment. After all, you'll look pretty silly in court if you haven't communicated your bank details, for example.By including these 12 important points you should be able to construct an LBA that ticks all the right boxes for successful debt recovery.
Alternatively, your solicitor may be able to send an LBA on your behalf. Another option is to use our LBA template to ensure you don't leave anything to chance.
