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Successfully recovering unpaid debts is important for any business. When individuals or businesses don't pay you back what they owe, it can cause significant issues with cashflow and make running your business much more stressful. However, many businesses struggle with handling debt recovery themselves. It can sometimes be a difficult balance to manage business relationships positively whilst also chasing down late and non-payments. This is why Forbes Collect offer a commercial debt recovery solution that handles all of the hassle and enables you to instead focus on other important business matters. We work with businesses and organisations of all sizes to successfully recover debts that they are owed, with our expertise in this area giving our clients a great chance of positive outcomes every time.
Once a payment has been missed without arrangements having already been made for this, your business is within its rights to begin the process of recovering this debt. There is a legal process that must be followed for debt recovery if you may need to take legal action against the other party further down the line, and a letter before action is often the only action needed before the debtor chooses to pay what they owe.
Find out more about the process of sending a letter before action below.
A letter before action, sometimes also known as a pre-court letter before action, is part of the pre-action protocols that are required in England and Wales to ensure the debtor is given a reasonable amount of time to pay what they owe before the matter is taken further.
A letter before action is a letter written and sent by your debt recovery team that demands payment from the debtor within the next 14 days for limited companies and 30 days for individuals. These timeframes ensure that we are adhering to the Pre-Action Protocols for Debt Claims. If the amount owed is not repaid during this period of time, the letter outlines that court action will commence. The same applies if you receive no response to the letter before action whatsoever.
Sending an unpaid invoice letter before action can be a highly effective way of successfully prompting payment of the debt, without any further steps being needed. This type of letter, communicates that you are taking the matter seriously, and this alone can be enough to motivate the debtor to make full payment.
With the letter before action protocol being met, it means that if you do unfortunately have to take the matter further and apply to the Court for a judgment on the debt, you have already fulfilled the appropriate protocol and can immediately move to the next stage of the commercial debt recovery process. For those businesses who try to take legal action without having first followed the appropriate protocol with the letter before action, they will need to wait until these actions have been followed before they can proceed with further measures to try and recover what they are owed.
You are able to draft your own letter before action and send it to a debtor yourself as part of the pre-action protocol guidelines. However, at Forbes Collect, our years of experience have shown us that in many cases, debtors take a letter before action from a debt recovery team more seriously than if they receive another letter from the business they owe money to. Previous debt recovery action that we have taken on behalf of clients indicates that when another business receives a letter before action from a debt recovery team, it is more likely to result in them satisfying the debt.
By instructing Forbes Collect to handle your commercial debt recovery process from start to finish, you can distance yourself and your business somewhat from the letter before action and any further legal action or communications that are needed, which can help you to maintain better business relationships and means that you avoid the stress and hassle of keeping this task in-house.
For more information about how we can help you with a letter before action, debt enforcement or the entire debt recovery process for your business, get in touch with the team by calling 0800 689 4176, request a callback or use our online contact form.