Immediate Debt Recovery Steps

Immediate Debt Recovery Actions #

If a debtor isn’t paying and time is critical, take these urgent steps.

Step 1: Secure Your Position #

  • Gather essential documents immediately:
    • Invoices & contracts – Ensure all amounts and terms are correct.
    • Payment history – Bank records, bounced cheques, or failed transfers.
    • Communication records – Emails, letters, call logs proving requests for payment.
    • Security agreements – Review personal guarantees or collateral clauses.
    • Trading history – Any patterns of late payment or prior disputes.
  • Assess risk before contacting the debtor:
    • Company searches – Check for insolvency risk on Companies House.
    • Court records – Look for recent CCJs or legal action against them.
    • Asset checks – Identify any property, vehicles, or accounts they own.
  • Protect your assets immediately (if applicable):
    • Exercise “Retention of Title” rights – Retrieve unpaid-for goods.
    • Stop all further supply/services – Avoid adding to the debt.
    • Inform credit insurers – If covered, start the claims process.

Step 2: Contact the Debtor NOW #

  • Call the decision-maker directly – Avoid lower-level staff.
  • Confirm payment status – Ask “When can we expect full payment?”
  • Send immediate written notice – Confirm call details via email.
  • Use multiple contact methods:
    • Phone + Email – Documented follow-ups.
    • Formal Letter (via Recorded Delivery) – Adds legal weight.
    • In-person visit (if appropriate) – Shows urgency.
    • Alternative contacts – Reach out to directors/owners if needed.

Use this template for an immediate demand email:

Subject: Urgent Payment Required – [Invoice #]

Dear [Debtor’s Name],

Our records show an outstanding balance of £[Amount], due since [Due Date].

Please arrange full payment immediately. If we do not receive funds within [X days], we will escalate the matter, which may include:

  • Late payment interest & fees under the Late Payment of Commercial Debts Act.
  • Formal legal proceedings including a statutory demand or CCJ application.
  • Third-party enforcement such as debt collectors or High Court enforcement.

Please confirm receipt of this notice and your intended payment date.

Regards, [Your Name]

  • Issue a Statutory Demand – If the debt is over £750 (companies) or £5,000 (individuals).
  • Send a Letter Before Action (LBA) – A final warning before court action.
  • Freeze Debtor’s Assets – Apply for a freezing order if fraud is suspected.
  • Use High Court Enforcement – If you already have a judgment over £600.
  • Consider Insolvency Action – If the debtor is likely to collapse.

Use this template for a Statutory Demand Notice:

Subject: Statutory Demand for Payment – [Invoice #]

Dear [Debtor’s Name],

This is a formal Statutory Demand under the Insolvency Act 1986. You owe £[Amount], which has remained unpaid since [Due Date].

You have 21 days from the date of this letter to settle this debt. If payment is not received, we may:

  • File for winding-up/bankruptcy proceedings.
  • Seek High Court enforcement against assets.

Please consider this a final notice. We strongly advise you to settle immediately to avoid further costs.

Regards, [Your Name]

Step 4: Emergency Court & Law Enforcement Actions #

  • If fraud is suspected:
    • Report to Action Fraud.
    • Notify the police (for asset misappropriation or deception).
  • Apply for court orders if needed:
    • Freezing Orders – Stops the debtor from moving money.
    • Possession Orders – Recover goods supplied but unpaid for.
    • Attachment of Earnings – Deducts debt from debtor’s salary.
  • Use emergency court procedures:
    • Ex-parte applications – Quick decisions without the debtor present.
    • International orders – If the debtor may transfer assets abroad.

Final Checklist: Immediate Debt Recovery Plan #

Within the First 24 Hours #

  • Review invoices, contracts, and all payment records.
  • Check Companies House, CCJ records, and asset ownership.
  • Contact debtor immediately via phone, email, and letter.
  • Cease supply/services and secure any unpaid-for goods.

After 48 Hours (If No Payment or Response) #

  • Send a final demand letter warning of legal action.
  • Consider issuing a Statutory Demand (if above legal thresholds).
  • Engage solicitors for Letter Before Action (LBA).

After 7 Days (If No Payment) #

  • Begin court proceedings for a County Court Judgment (CCJ).
  • Seek High Court enforcement (if applicable).
  • Apply for a freezing order if assets may be moved.
  • Consider winding-up or bankruptcy proceedings.

Key Takeaways #

  • Act FAST – The sooner you take action, the better your recovery chances.
  • Use all contact methods – Calls, emails, legal letters, and visits.
  • Issue formal legal threats – Statutory Demands and CCJ applications work.
  • Freeze assets if necessary – Freezing orders can prevent money disappearing.
  • Don’t wait too long – Delay weakens your legal position.

Speed and strategy are critical – take decisive action now!