How many chaser letters should I send before taking legal action?

There is no fixed rule, but best practice is to send at least two to three chaser letters over a period of four to six weeks before escalating to a formal letter before action. The court expects creditors to have made reasonable efforts to recover the debt before issuing proceedings. Keep copies of all correspondence as evidence.

What is the limitation period for recovering a debt?

Under the Limitation Act 1980, you have six years from the date the debt became due to bring a court claim for a simple contract debt (section 5). For debts evidenced by a deed, the period is twelve years (section 8). Once the limitation period expires, the debt becomes statute-barred and cannot be enforced through the courts, although the debt still technically exists.

Can I charge interest on an overdue invoice?

For business-to-business debts, the Late Payment of Commercial Debts (Interest) Act 1998 gives you an automatic statutory right to charge interest at 8% above the Bank of England base rate, even if your contract does not mention interest. You can also claim a fixed sum for recovery costs. For debts owed by consumers, you can only charge interest if it was agreed in the contract.

Should I send the letter by email or post?

You can send a debt recovery letter by either email or post. However, if you later need to escalate to a letter before action, it is advisable to send that by recorded delivery post. For initial chaser letters, email is perfectly acceptable and has the advantage of providing an instant delivery record and timestamp.

What if the debtor disputes the amount owed?

If the debtor disputes the debt, you should carefully consider their reasons. If the dispute is genuine, try to negotiate a resolution. If you believe the dispute is without merit, you should set out your position clearly in writing and proceed with a letter before action if necessary. The court will expect both parties to have attempted to resolve disputes before issuing proceedings.

Can I use a debt collection agency instead?

Yes. If you prefer not to pursue the debt yourself, you can instruct a debt collection agency. Agencies that collect consumer debts must be authorised by the Financial Conduct Authority (FCA). Most agencies charge a percentage of the recovered amount (typically 10% to 25%) or a fixed fee. Alternatively, you can assign the debt to a debt purchaser who will buy it at a discount.

Free Debt Recovery Letter Template (UK)

A debt recovery letter is a formal written request for payment of an outstanding debt.

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creditor

Your Name / Business Name*

Your Address*

debtor

Debtor Name*

Debtor Address*

debt-details

Invoice / Reference Number*

Amount Owed (£)*

Original Payment Due Date*

Description of Goods/Services*

Terms

New Payment Deadline*

Payment Methods Accepted*

execution

Date of Letter*

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DEBT RECOVERY LETTER [creditorName] [creditorAddress] [date] [debtorName] [debtorAddress] Dear [debtorName], OVERDUE PAYMENT — [invoiceReference] — [amountOwed] I am writing to bring to your attention that payment of [amountOwed] in respect of [invoiceReference] remains outstanding. This amount was due on [originalPaymentDate] and is now overdue. The amount relates to the following: [servicesDescription]. Despite the payment date having passed, I have not received payment or any communication from you regarding this matter. I would be grateful if you could arrange payment of the full amount of [amountOwed] by [paymentDeadline]. Payment can be made as follows: [paymentMethod] Please use reference "[invoiceReference]" when making payment so that it can be allocated correctly. If you have already made payment, please disregard this letter and accept my apologies. If payment has been sent, please provide details (date, amount and method) so that I can trace the transaction. If you are experiencing difficulties making payment, please contact me as soon as possible to discuss the matter. I am willing to consider a reasonable payment arrangement if full payment cannot be made immediately. Please note that if payment is not received by [paymentDeadline], I may need to take further steps to recover this debt, which could include issuing a formal letter before action and commencing court proceedings. I would prefer to resolve this matter amicably and without the need for legal action. I look forward to hearing from you or receiving payment promptly. Yours faithfully, ___________________________ [creditorName] Date: [date] Ref: [invoiceReference]

Important Notes

Legal Disclaimer

A debt recovery letter is not a formal pre-action protocol letter and does not need to comply with the specific requirements of the Pre-Action Protocol for Debt Claims or the Practice Direction on Pre-Action Conduct. However, it forms part of the correspondence trail that the court will consider when assessing whether the creditor has acted reasonably. Under the Limitation Act 1980, the limitation period for bringing a claim for a simple contract debt is six years from the date the cause of action accrued (section 5). For debts evidenced by a deed, the limitation period is twelve years (section 8). The Late Payment of Commercial Debts (Interest) Act 1998 applies to commercial debts between businesses and allows the creditor to claim statutory interest at 8% above the Bank of England base rate, plus a fixed sum for recovery costs ranging from £40 to £100 depending on the size of the debt.

This template is provided for informational purposes only and does not constitute legal advice. For complex legal matters, we recommend consulting a qualified solicitor.

Frequently Asked Questions

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