The Debt Collection Process

There are three main stages to the debt collection process.

  1. Letter before action/Late payment demand
  2. Claim filed with Court
  3. Application for enforcement

To begin with, a letter is sent to the debtor stating the value of the outstanding debt and reserving the right to proceed to court action. Often debts are quickly settled without the need to take the matter further.

However, should payment not be made then court action can be issued and a claim form filed with the Court.

Finally, if the debt is still not paid after the time authorised by the Court has elapsed, a judgment can be issued and an application for enforcement made.

Three Main Steps

We will send a letter to the debtor informing them that court action will be taken should payment not be received within seven days of the date of the letter. Usually this is enough to force the debtor into paying the money owed, but should this fail, you may instruct us to proceed with court action, safe in the knowledge that all legal requirements have been met.

As an alternative to the letter before action, a late payment demand may be sent, which allows you to claim interest, compensation and any reasonable debt collection costs in line with the Late Payment of Commercial Debts (Interest) Act 1998, subject to both parties acting in the course of a business.

Where an invoice is not paid or is paid late, the Act and Regulations 2002 and 2013 allow you to charge interest at the annual rate of 8% above base rate for each day your invoices are overdue. You are also entitled under the same regulations to charge for compensation against your debtor if an invoice is overdue by as little as a day. The compensation you are allowed to charge depends on the amount of money owed to you.

Compensation amounts:

Size of Unpaid Debt

Compensation Amount





£10,000 and above


If the debtor has not paid after court action proceedings have been issued and no defence has been filed (or the defence was struck out by a Judge) the next step available is to issue a County Court Judgment (CCJ). Should you instruct us, we will file for a CCJ on the same day as instruction.

If the debtor fails to pay the CCJ within one month, this is registered and will affect the debtor’s credit rating, therefore making it difficult for them to apply for credit etcetera. A CCJ remains registered for 6 years, so there is a huge incentive for the debtor to pay promptly once judgment has been issued.

How Much Will It Cost?

The exact cost of filing for court action will depend on the value of the debt you are claiming.

Interested? Or have a question we did not answer? Feel free to give us a call on 0161 917 5071 or write your questions in the form below and we will get back to you as soon as possible. 

This publication is a general guide and summary of the law and should not be construed as legal advice. It should not be acted upon or relied upon in any way and should not replace legal advice which is bespoke to your particular circumstances.

GWA Law 2020©


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