How to send a letter before action (Letter of Claim) for debt?

You’ve chased payment, sent reminders, and still nothing. Now what? A Letter Before Action (LBA) is your most powerful tool before court, a formal ultimatum that often gets results where phone calls failed. Done right, it can recover your money without expensive litigation. Done wrong, it weakens your case. Whether you’re owed hundreds or thousands, understanding this process protects you. For complex disputes or unresponsive debtors, a specialist solicitor in debt recovery and collection ensures you don’t jeopardise your claim.

Discover how to draft a legally compliant Letter Before Action that gets results and protects your right to recover what you’re owed.

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Letter Before Action: Definition and timing

A Letter Before Action (LBA), also called a Letter of Claim, is your formal written notice demanding payment before starting court proceedings. It’s the final step between informal collection efforts and legal action, giving the debtor one last opportunity to settle whilst demonstrating to any future court that you’ve acted reasonably.

Send your debt collection letter when:

• Previous reminders have failed: You’ve already sent at least one payment reminder or invoice chaser without response.
• The debt is undisputed and overdue: The amount owed is clear, the debtor hasn’t raised legitimate concerns, and payment is significantly late (typically 30+ days).
• You’re prepared to escalate: You’re genuinely ready to pursue court action if payment isn’t received, not bluffing.
• The debt is economically viable to pursue: The amount justifies potential legal costs (generally £100+ for individuals, more for businesses).
• You have supporting documentation: Invoices, contracts, proof of delivery, or other evidence establishing the debt.

Pre-action protocol: What you must follow

The pre-action protocol for debt claims sets out the procedural rules you must follow before issuing court proceedings. Introduced to encourage early settlement and reduce unnecessary litigation, this framework ensures both parties have adequate opportunity to resolve disputes without judicial intervention. Failure to comply can result in cost penalties, even if you ultimately win your case.

Essential requirements of your Letter Before Action include:

• Provide full details of the debt: Your letter must specify the exact amount owed, breakdown of charges, interest calculations, and how the debt arose.
• Allow reasonable time to respond: Give the debtor at least 30 days to reply (14 days minimum for straightforward claims, though 30 is standard practice).
• Include essential information: Attach copies of relevant documents (invoices, contracts, terms), explain consequences of non-payment, and outline your intended next steps.
• Consider the debtor’s circumstances: If they raise genuine financial difficulties, you should discuss reasonable payment arrangements before rushing to court.
• Act proportionately: Your response must be reasonable relative to the debt size and circumstances.

Sending your Letter Before Action: Step-by-step

Once you understand what the Pre-Action Protocol requires, executing the process correctly is crucial. How you send your Letter Before Action can be just as important as what it contains; poor delivery methods undermine even the strongest claim.

Follow these steps:

1. Draft your letter professionally: Use formal business correspondence style, remain factual, avoid emotional or threatening language that could backfire in court.
2. Attach all supporting evidence: Include copies (never originals) of invoices, signed contracts, delivery notes, and previous correspondence proving the debt.
3. Choose trackable delivery: Send via recorded delivery, signed-for postal service, or courier with proof of receipt to eliminate “I never got it” defences.
4. Send to correct addresses: Use the debtor’s registered business address and any known trading address simultaneously.
5. Keep complete records: Retain copies of everything sent, postal receipts, tracking numbers, and delivery confirmations.
6. Diarise response deadlines: Mark your calendar for when the 14-30 day period expires and plan your next move accordingly.

Using a template or sample for your debt collection letter

Many creditors use a template or sample debt collection letter to ensure consistency and compliance. Pre-formatted documents can save time and reduce the risk of omitting essential information, but they require careful customisation to reflect your specific circumstances and meet legal standards.

Benefits and considerations when using templates:

• Saves time and ensures structure: A quality template provides the correct legal framework and formal tone without starting from scratch.
• Reduces compliance errors: Reputable sample letters already incorporate pre-action protocol requirements, minimising technical mistakes.
• Must be tailored to your debt: Never send generic letters unchanged; personalise every detail including amounts, dates, debtor information, and supporting evidence.
• Source matters significantly: Use templates from legal professionals, government websites, or reputable legal advice services, not random internet forums.
• Doesn’t replace legal advice: Templates work for straightforward debts but complex disputes, large sums, or defended claims need professional input.

Basic template structure:

What happens after sending your Letter of Claim?

Once your Letter of Claim is delivered, several scenarios may unfold:

• Full payment received: The debtor pays the entire amount within the deadline; your matter concludes successfully, though confirm receipt and retain records for your accounts.
• Part payment or payment proposal: The debtor offers partial payment or requests an instalment plan. Evaluate whether accepting is commercially sensible versus pursuing the full amount through court.
• Dispute raised: The debtor contests the debt, claims defective goods/services, or raises set-off counterclaims. You must investigate their defence and decide whether it has merit before proceeding.
• Request for more time: The debtor acknowledges the debt but requests extended deadline due to cashflow difficulties. Granting reasonable extensions often secures payment without litigation costs.
• Complete silence: No response whatsoever by the deadline; you’re now entitled to commence county court proceedings or other enforcement action.

FAQs

Can I charge interest on the debt in my Letter Before Action?

Yes, if your contract allows it or you’re claiming statutory interest for business debts under the Late Payment of Commercial Debts Act 1998.

What if the debtor has moved and I don’t have their current address?

Send to their last known address and registered business address. Courts accept this as reasonable if you’ve made genuine efforts to locate them.

How long should I wait before starting court proceedings after my deadline expires?

Allow 7-14 days after your deadline for postal delays, then proceed promptly to maintain credibility.

A Letter Before Action is your most effective pre-court tool for recovering debts. Follow the pre-action protocol, include all essential information, and send via trackable methods. When done correctly, it often secures payment without litigation, saving time and money.

Get your debt recovered!

Qredible’s network of specialist debt recovery and collection solicitors can draft your Letter Before Action, negotiate settlements, and pursue court proceedings if needed.

KEY TAKEAWAYS:

• A Letter Before Action is your formal final demand before court, demonstrating compliance with the pre-action protocol and that you’ve exhausted reasonable debt recovery attempts.
• Your letter must include precise debt details, supporting evidence, clear deadlines (14-30 days), consequences of non-payment, and be sent via trackable delivery to prove receipt.
• While templates work for simple debts, solicitors specialising in debt recovery and collection ensure compliance, increase payment success rates, and seamlessly transition to court if necessary.