Pre-Action Protocol – Debt Recovery

Debt Recovery Letters to Individuals & Sole Traders

The Civil Procedure Rules introduced a Pre-action Protocol for Debt Recovery on 1st October 2017 which brought into force new procedures for commencing a debt recovery claim against individuals and sole traders.  This Protocol applies to any business (including sole traders and public bodies) claiming payment of a debt from an individual (including a sole trader).

As in the preceding Pre-action Protocol, a creditor must first send to the debtor a “letter of claim”.  However the current Protocol now places a heavier burden on the creditor to provide full particulars of the debt and how the debt arose. 

The letter of claim must now include:

  • The amount of the debt;
  • Whether interest or other charges are continuing;
  • Where the debt arises from a verbal agreement;
  • Who made the agreement, what was agreed (including, as far as possible, what words were used) and when and where it was agreed;
  • Where the debt arises from a written agreement;
  • The date of the agreement, the parties to it and the fact that a copy of the written agreement can be requested from the creditor;
  • Where the debt has been assigned;
  • The details of the original debt and creditor, when it was assigned and to whom;
  • If regular instalments are currently being offered by or on behalf of the debtor, or are being paid, an explanation of why the offer is not acceptable and why a Court claim is being considered;
  • Details of how the debt can be paid (for example, the method of and address for payment) and details of how to proceed if the debtor wishes to discuss payment options;
  • The address to which the completed reply form should be sent.

The following documents must also be provided with the letter:

  • An up to date statement of account, which should include details of any interest and administrative or other charges;
  • Copies of documents known as an “information sheet” and “reply form”, both produced by the Ministry of Justice (MOJ);
  • A copy of a document called a “financial statement form” also produced by the MOJ.

The letter of claim must be sent by post, unless the debtor has made an explicit request that correspondence should not be sent by post.  Notably, the debtor now has 30 days from the date of the letter of claim to respond. This means that the creditor cannot start Court proceedings within this 30 day period and consideration should be given to the possibility that a reply may be posted close to this deadline.

For single instructions to for pre-action debt collection against individuals or sole traders, we charge the sum of £295 plus VAT and any disbursements.


Bulk Pre-action Protocol Debt Recovery

If you require our assistance to help your business recover multiple debts where the Pre-action Protocol is applicable, our debt recovery solicitors will be happy to speak with you today to discuss how our services can work for your company. 

With our Head Office based in Hull and two Consulting Offices in London and Leeds we are easily accessible for consultations. Call us on 01482 616 616 or 0800 037 1305 to book a free telephone consultation to discuss your issues and requirements.

Contact us today and see how we can help you

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