Home » Recovering Your Debts
Written by: Braden Milburn

It is unfortunately an all too common scenario: you agree to carry out a service to someone and in return they agree to pay you; you carry out the service; you issue an invoice and then…nothing. What then? What do you do if your debt isn’t paid?

Failing to correctly recover a debt could further burden you financially. In this current economic climate, it is imperative that you understand your rights when recovering debts owed.


Acknowledging the Debt

To establish an acknowledgement of debt, there must be an express or implied admission that the debt is due, further, the acknowledgement must be in writing and must be signed by the person to whom the debt is owed.

A debt will be acknowledged where the debtor provides direct or indirect admission that the debt is due or where the debtor behaves in a manner which shows that existence of the debt is recognised.


The Recovery Process


Step 1: Initial Consult and Review

It is important that you understand your position before commencing recovery proceedings. In some cases, you can avoid the costly mistake of making a poor claim by simply reviewing the debt with a solicitor.

This involves our experienced solicitors meeting with you and reviewing the nature of the debts owing. From here, we can ascertain your prospects in recovering the debt and advise you of your options.


Step 2: Letter of Demand

The starting point in litigiously recovering a debt is to issue a formal letter of demand. This outlines the nature of the debt and the amount owing. This letter will ordinarily include wording to serve as a “Final Warning” before proceeding to the Court should the debt not be resolved.

Many debt recoveries can be resolved at this stage which resolves the matter at minimal time and cost on to you.

In case of a dispute, weighing the available options for resolution is crucial. At the same time, litigation may seem like the obvious choice, but sending a letter of demand could prove to be more efficient and cost-effective as a first step.


Advantages of using a letter of demand 

  • Cost-effective resolution: Legal fees and court costs can be substantial. A letter of demand offers a less expensive alternative to resolve the issue swiftly.
  • Stronger legal position: A well-drafted demand letter can strengthen your case if litigation becomes necessary as it is evidence of an attempt to settle early without the need for court intervention.
  • Preserved relationships: Demonstrating your willingness to negotiate outside of court can potentially salvage the relationship with the other party.
  • Quicker resolution: Compared to the often lengthy court process, a demand letter can lead to a faster resolution, saving you time and stress.


Step 3: Court Proceedings

If the debtor fails to respond or pay the debt as per the demand letter, legal proceedings can then be initiated. This involves filing a claim in the appropriate court. The choice of court depends on the amount of the debt, as different courts have different monetary jurisdictions.

If the debtor does not respond to the claim or if the Court finds in your favour, a judgment is obtained. This judgment is a formal decision by the court that the debtor owes the debt to the creditor. This is either “summary judgment” or “default judgment”.


Step 4: Enforcement

Once a judgment is obtained, various enforcement actions can be taken to recover the debt. This may include through the Courts by issuing an enforcement warrant to seize and sell the debtor’s assets; or insolvency with bankruptcy against an individual debtor; or issuing a statutory demand and then initiating liquidation insolvency proceedings if the debtor is a corporation.


Time Limitations on Debt Recoveries

You must commence recovery proceedings within six (6) years from the date of which the debt is acknowledged to be owing, otherwise you may lose your right to do so without leave being granted by the Court.


How can we help?

If you are struggling to recover your debts, contact one of our experienced solicitors here at Greenhalgh Pickard. Gain peace of mind that our solicitors can provide you with advice and guide you through the process to ensure you are fully informed on your prospects of success throughout the entire process.



The information contained in this article is for general informational purposes only and is not intended to provide legal advice or substitute for the advice of a professional. This information does not consider your personal circumstances and may not reflect the most current legal developments. Should you need advice, please contact our firm for targeted information relating to personal your situation.