For a lot of businesses, you may extend credit in order to encourage business. Unfortunately, sometimes people can run into difficulties getting this money back, which is why it is important to be aware of the legalities and issues around debt recovery.


A big part of avoiding issues around debt is to prevent people from getting in trouble to start with. Clear invoices and notices for when payment is due will help people avoid getting into problems beforehand. In some cases, there may be an issue that needs resolving, and you may have to provide an alternate payment plan (over time, you can usually tell who is having issues and who is simply avoiding paying).

Debt collection

Before using a debt collection service, you should look at the sums involved and the cost of pursuing it. In some cases, it may be better to write off a bad debt rather than trying to get it back.

However, if you feel that the sum is worth pursuing, a debt recovery company can be a better alternative to pursuing payment through the court. It is important to use a reputable debt recovery company, as this means you are more likely to get payments while at the same time, not making a client feel like they are being pursued.

Notice of legal action

If pursuing costs through debt collection doesn’t work, then you should then consider applying to pursue through the courts. Sending a letter providing notice will give the customer a chance to repay by a certain date, or they will be expected in court.

If the debt is more than £750, it is possible to ask for a statutory demand for payment. In the event that the customer doesn’t dispute the demand yet still doesn’t pay a court can wind up their business (or if they don’t have a business, they may be declared bankrupt). It is possible to send this letter yourself, or you can use the services of a legal representative.

A letter may well be enough motivation for a person or company to settle the payment, or at the very least, contact you in order to create an alternative payment arrangement.

If they do not repay (or if they fail to stick to a new payment arrangement), then this is the point where you would have to go through the court to reclaim debts.

If you are in debt

If you are in debt, it is important to contact creditors as soon as possible. While these situations can be stressful, it is worse if you attempt to avoid repayments and not contact the creditors involved.

We can help

There is often a stereotype that legal representatives are cold and deal with issues in a distant way. At Larcomes, we believe in providing the best resources, but also support for our customers when dealing with a stressful situation, something that can often be the case when either pursuing debts or dealing with debt yourself. For more information, please contact our team today to see how we can help you resolve these issues.