How to Recover a Personal Debt

If a friend or family member owes you money it can be excruciatingly uncomfortable to ask them to pay you back.  However, if the size of the debt is substantial then you may have no choice but to take measures to collect the money owed to you. This guide is designed to inform you of the different steps you can take to collect a personal debt.

Should I Try Negotiate First?

Trying to recover a personal debt through the Court can be expensive and stressful.  It is always advisable to try and negotiate a win win solution with the person who owes you money before you consider litigation.  Perhaps they could repay you in instalments or you would be prepared to accept half the amount of the debt?  By entering into negotiations you also stand a better chance of preserving the relationship.

Can I get my Solicitor to Write a Letter?

Yes, this is ideally the first step to take if negotiations between yourself and the person who owes you money fails.  For a reasonable sum, a Solicitor will write to your debtor and advise them of the amount of money they owe, what the debt is for and the steps you have already taken to try and recover the money.  The letter will then lay out the date you expect payment to be made and the steps you plan to take if the request for payment is ignored.

Should I Use a Debt Recovery Agency?

Using a debt recovery agency is an option; however, bear in mind that some may not have legally trained staff dealing with debt collection.  Many law firms have a department specifically dedicated to debt collection and their prices are very reasonable.  If you wish to preserve the relationship between you and the debtor, it may be prudent to use an organisation that employs legally trained staff who will strive to deliver the results you want.

Can I Make a Claim in Court?

You can make a claim in Court by obtaining a County Court Judgment for the repayment of the debt.

However, before a Judgment is issued, the Court will send the debtor a County Court Claim Form, or Summons which the debtor has 14 days to reply to.  The debtor will need to make some sort of offer of payment and if the Court accepts this, it will issue a County Court Judgment detailing how and when the amount is to be paid.  If the offer of payment is not accepted or the debtor does not reply to the summons within 14 days, a judgment will be sent detailing the amount to be paid.  This amount will be decided by the Court.

Debt recovery is an unpleasant process; however, by following the correct procedures you will be able to recover the money owed to you and preserve your relationship with the debtor, should you so desire.