First Steps in Debt Recovery

First Steps in Debt Recovery #

The sooner you act, the better your chances of getting paid. This guide walks you through the critical first steps in recovering overdue invoices before escalating to legal action.

Step 1: Verify the Debt (Avoid Wasting Time on Errors) #

Before chasing a debt, double-check:

  • Correct invoice details – Amount, due date, payment terms
  • Invoice was actually sent & received (check emails/spam folders)
  • Payment deadline has passed (allow for processing times)
  • No disputes or missing paperwork

Red Flag: If the debtor suddenly claims they “never received the invoice,” ask for confirmation of their accounts team’s email and re-send with “Read Receipt” enabled.

Step 2: Make First Contact (How to Ask for Payment Professionally) #

Start with a polite but firm reminder. Often, a simple nudge is enough.

First Call Script (Friendly Reminder)

“Hi [Debtor’s Name], this is [Your Name] from [Your Company]. I’m calling regarding invoice [#123] for £[Amount], which was due on [Date]. I just wanted to check if payment has been processed?”

  • If they confirm payment is coming – Get a date & follow up.
  • If they claim an issue – Ask what’s wrong & request details by email.
  • If they ignore the call – Send a written reminder.

Follow-Up Email Template (After Call)

Subject: Overdue Invoice Reminder – [Invoice #123]

Dear [Debtor’s Name],

Following our call today, I wanted to confirm that invoice [#123] for £[Amount] remains outstanding.

Please advise when payment will be made. If there are any issues, let me know so we can resolve them quickly.

Best regards, [Your Name] [Your Company]

Tip: Always log the date & time of the call in case legal action is needed later.

Step 3: Document Everything (Create a Paper Trail) #

Keep detailed records of all communications:

  • All emails & letters sent
  • Phone call logs (date, time, person spoken to, summary)
  • Screenshots of read receipts & email confirmations
  • Any written payment commitments

Why? If legal action becomes necessary, a strong paper trail speeds up the process.

How to record calls on iPhone | How to record calls on Android

Step 4: Check the Debtor’s Financial Status #

Before escalating, check if the debtor is in financial trouble.

Useful checks:

Warning Signs:

  • Frequent excuse-making (“We’re waiting for another payment to clear”)
  • Sudden communication silence
  • Business address changes frequently

If they look insolvent, act fast – unsecured creditors rarely get paid!

Step 5: Offer a Payment Plan (If Full Payment Isn’t Possible) #

Some payment is better than none! If the debtor is struggling, suggest a plan.

Negotiation Tips:

  • Ask for an immediate partial payment
  • Set clear deadlines for remaining payments
  • Get the plan in writing (email or signed agreement)

Payment Plan Email Template

Subject: Payment Arrangement Proposal – [Invoice #123]

Dear [Debtor’s Name],

I understand that you may be experiencing financial difficulties. To help resolve the outstanding balance of £[Amount], we can offer a structured payment plan.

Please confirm if you can make an initial payment of £[First Payment] by [Date], with the remaining balance payable in [X] monthly installments of £[Amount] each.

Let me know your thoughts so we can formalize an agreement.

Best regards, [Your Name] [Your Company]

Tip: If they default on a payment plan, move straight to legal action.

Next Steps: What to Do if They Still Don’t Pay #

  • After 7 days: Send a final demand letter
  • After 14 days: Issue a statutory demand (for debts over £750)
  • After 21 days: Start legal proceedings (court action or enforcement)

Read: Legal Options for Debt Recovery →

Don’t delay – the longer you wait, the harder it is to recover your money!