Debt Recovery Letters & Legal Demands #
A strong paper trail increases your chances of recovering a debt.
This guide covers:
- Letter templates for chasing payments
- Legal notices for escalating action
- When to send a statutory demand
- Checklist for writing effective letters
1. Payment Reminder Letter Sequence #
- Step 1: First Reminder (Polite Reminder) – Send after 7 days overdue
- Step 2: Second Reminder (Firm Request) – Send after 14 days overdue
- Step 3: Final Demand (Urgent Action Required) – Send after 21 days overdue
- Step 4: Notice of Intended Legal Action – Send after 30 days overdue
- Step 5: Letter Before Action (LBA) – The final step before legal action
These are all ideas of what an email may look like, always switch them to fit your current position or get expert advice
Template 1: First Reminder Letter (Polite Reminder) #
Subject: Friendly Reminder – Invoice #[Invoice Number] Overdue
Dear [Debtor’s Name],
We hope this email finds you well. Our records indicate that Invoice #[Invoice Number] for £[Amount] was due on [Due Date] and remains unpaid.
If payment has already been made, please disregard this message. Otherwise, we kindly request settlement at your earliest convenience.
Payment Details: Bank: [Bank Name] Sort Code: [Sort Code] Account Number: [Account Number]
Please confirm once payment has been processed. Let us know if you need any further details.
Regards, [Your Name] [Your Company]
Template 2: Second Reminder Letter (Firm Request) #
Subject: Second Reminder – Immediate Payment Required
Dear [Debtor’s Name],
Despite our previous reminder, Invoice #[Invoice Number] for £[Amount] remains unpaid. The due date was [Due Date], and we must now insist on immediate payment.
Outstanding Balance: £[Amount] New Due Date: [Date, e.g., 7 days from today]
Please make payment without delay to avoid further action. If there is any issue, contact us immediately.
Regards, [Your Name] [Your Company]
Template 3: Final Demand (Urgent Action Required) #
Subject: FINAL DEMAND – Overdue Payment for Invoice #[Invoice Number]
Dear [Debtor’s Name],
This is our final notice regarding the overdue balance of £[Amount] for Invoice #[Invoice Number], originally due on [Due Date].
Failure to settle this debt within [Final Deadline, e.g., 7 days] will result in formal legal action.
Next Steps If Payment Is Not Received:
- Referral to a debt collection agency
- Issuing a County Court Claim
- Possible statutory demand leading to insolvency proceedings
Please consider this letter as a final warning before we escalate this matter.
Regards, [Your Name] [Your Company]
When to Send a Legal Notice #
Legal Notice | When to Use It | Outcome |
---|---|---|
Letter Before Action (LBA) | Before filing a court claim | Final warning before legal action |
Statutory Demand | If debt is £750+ (company) or £5,000+ (individual) | Forces debtor to pay or risk insolvency |
Winding Up Petition | If the company ignores a statutory demand | Company liquidation |
Bankruptcy Notice | If an individual ignores a statutory demand | Starts personal bankruptcy process |
Template 4: Letter Before Action (LBA) #
Subject: Urgent – Legal Action Pending for Overdue Debt
Dear [Debtor’s Name],
Despite multiple requests, your outstanding balance of £[Amount] for Invoice #[Invoice Number] remains unpaid. This letter serves as a final legal notice before court action.
If full payment is not received within 7 days, we will proceed with:
- Filing a County Court Claim
- Applying for a County Court Judgment (CCJ)
- Instructing enforcement agents to recover the debt
To avoid these consequences, make payment immediately to the account below:
Bank: [Bank Name] Sort Code: [Sort Code] Account Number: [Account Number]
If payment has already been made, please provide proof of payment. Otherwise, consider this a final warning.
Regards, [Your Name] [Your Company]
Next Step: If they ignore this letter, file a court claim →
Debt Recovery Letter Checklist #
- Include invoice references and amounts
- Mention due dates and late payment fees
- State next steps (court action, debt collection, legal notice)
- Set clear deadlines for payment
- Keep a record of all communications
Take Action Now #
- Step 1: Send the First Reminder Letter
- Step 2: If no payment, send the Final Demand Letter
- Step 3: Issue a Letter Before Action (LBA)
- Step 4: If ignored, send a Statutory Demand or file a claim
A structured approach helps maximize debt recovery success!