If a person or company owes you money and won't pay, there are ways of recovering the debt. The action you take will depend on the size of the debt and your ability to prove that you are owed the money.
Contacting the person or company who owes you money
Speak to the person who owes you money. You may be able to informally agree a plan to get the money repaid.
If that doesn’t work, you can write a letter. Tell them:
- how much they owe
- what it’s for
- what you have already done to try to get the money
It's important to include information like:
- who's involved - the name and address of both you and the person who owes you money
- dated copies of all paperwork for the debt
- a date when you expect payment (at least seven days)
- a request for the debtor to put in writing any issue or dispute they have with your statement
- details of the steps you'll take if payment isn't received
You should avoid:
- being drawn into heated arguments or lengthy correspondence
- threatening legal action that you're not prepared to follow up
Using mediation to reach agreement over debt dispute
If you are unable to come to an agreement over the debt, you can get help negotiating a solution using a mediation service.
In mediation, someone from a mediation service helps two sides find a solution to a dispute. It can be quicker, cheaper and less stressful than going to court.
The court will expect you to try to solve the dispute through negotiation or mediation before going to court.
If mediation doesn’t work, you can still take a case to court.
Using a solicitor
If you’re not able to come to an agreement, it can be helpful to discuss your case with a solicitor who's experienced in debt recovery.
For a fee, they can write a letter to the person who owes you money. The letter can tell them that legal action may be taken if they don't pay. A solicitor's letter can produce quick results.
Talking with a solicitor can also help define your case in legal terms and help identify further action that may be available to you.
Sometimes solicitors will work to a fixed fee. If they are charging an hourly rate, this is usually around£50.oo an hour.
Using a debt recovery agency
Some companies specialise in debt recovery and will employ a solicitor to take legal action to recover your debt. They may charge a fixed fee or take an amount of the money they recover on your behalf.
It's possible the agency mightnot use legally trained staff.
Recovering debts through the courts
If you can't reach agreement overthe matter in any other way, you may want to make a claim in court. This is normally used as a last resort. It's a good idea to seek independent legal advice first.
It's important to remember that:
- it can take months for a case to go to court
- there’s no guarantee you’ll win the case
- you may have to pay the other side’s costs if you lose the case
- if the other side can’t pay (for example, they’re bankrupt or not working), it will be hard to get money back
If win your case, you may have to apply to the Enforcement of Judgments Office EJO) to ask them to try to recover the money on your behalf, as the court won’t enforce a judgment.
There are further fees that the EJO will charge you to enforce your judgment. You can find out more information by contacting the EJO at:
- postroomejo@courtsni.gov.uk
Claiming online
Where the value of the claim does not exceed £5000, you can make a claim online using the Small Claims service.
More useful links
FAQs
A debt collector is generally a person or company that regularly collects debts owed to others or who has the primary purpose of collecting debts. They're likely contacting you because they're trying to reach a person who may owe a specific debt.
What does recover a debt mean? ›
Meaning of debt recovery in English
the process of making people or companies pay the money that they owe to other people or companies, when they have not paid back the debt at the time that was arranged: When problems arise, professional debt recovery has proved to be an effective way of regaining lost money.
Can you ignore debt recovery? ›
If you get a summons notifying you that a debt collector is suing you, don't ignore it. If you do, the collector may be able to get a default judgment against you (that is, the court enters judgment in the collector's favor because you didn't respond to defend yourself) and garnish your wages and bank account.
What is the 11 word phrase to stop debt collectors? ›
If you are struggling with debt and debt collectors, Farmer & Morris Law, PLLC can help. As soon as you use the 11-word phrase “please cease and desist all calls and contact with me immediately” to stop the harassment, call us for a free consultation about what you can do to resolve your debt problems for good.
Is rmp llc legit? ›
Is RMP Services A Scam? RMP Services is a legitimate and trusted debt collection agency licensed and bonded in all 50 states. However, as with most debt collectors, they have received complaints from consumers.
What are examples of debt recovery? ›
A very common example is failure by a bank customer to pay their bank loan or credit card debts. Other examples include trade customers failing to pay suppliers or customers of professional service suppliers who have reneged on their commitment to pay for the services they have received.
What happens after 7 years of not paying debt? ›
The debt will likely fall off of your credit report after seven years. In some states, the statute of limitations could last longer, so make a note of the start date as soon as you can.
How is debt recovery done? ›
The First Step to Debt Recovery
When a debtor falls behind on payments, the creditor typically initiates contact to remind them of the outstanding debt. This initial communication is usually done through letters, emails, or phone calls, politely requesting payment.
How to get your money back from a friend who owes you? ›
At the end of the day, you can never be too prepared to minimize the risk of not getting your money back from a loved one.
- Be direct. ...
- Don't let too much time pass. ...
- Be as professional as possible with the process. ...
- Craft a specific payment plan. ...
- Forgive the outstanding debt.
Hire a lawyer to file a case in the appropriate court. File a police complaint if you think you have been cheated. Get an order from the court to attach the person's property. Enforce the order by hiring a recovery agent to seize the person's property.
If you can't come to an agreement personally, you can try a mediation service. If they still refuse to pay, don't let the situation get heated. Depending on how much you are owed, there are legal routes you can go down. This includes making an official demand, issuing a County Court claim, and much more.
What's the worst a debt collector can do? ›
Debt collectors are not permitted to try to publicly shame you into paying money that you may or may not owe. In fact, they're not even allowed to contact you by postcard. They cannot publish the names of people who owe money. They can't even discuss the matter with anyone other than you, your spouse, or your attorney.
Will a debt collector sue me for $500? ›
Most debt collectors won't sue for less than $500. However, any unpaid debt can potentially result in collections legal action regardless of amount owed if the collector determines suing worthwhile.
What not to say to a debt collector? ›
Don't provide personal or sensitive financial information
Never give out or confirm personal or sensitive financial information – such as your bank account, credit card, or full Social Security number – unless you know the company or person you are talking with is a real debt collector.
What is the person to whom a debt is owed? ›
Credit Reporting Agencies (See Credit Bureaus) Creditor (also Original Creditor) A person, company, or entity to whom the debt is claimed to be owed.
What is the word for someone who is owed a debt? ›
Debtor or creditor are words you have probably heard before, but you might not be sure what they mean. They describe a relationship where one party owes money to another party. The debtor is the party that owes the money (debt), while the creditor is the party that loaned the money.
What is another name for a debt collector? ›
These debt collectors are also called debt collection agencies, debt collection companies, or debt buyers.
What is a person to whom something is owed called? ›
A creditor is a party (for example, person, organisation, company, or government) that has a claim on the services of a second party. It is a person or instruction to whom money is owed. A creditor may be a bank, supplier, or person that has provided credit to a company.
