What does the debt recovery process look like?

Most debt recovery agencies, like us, will always aim to recover a client’s money by negotiating with the debtor. However, sometimes communication fails and more formal steps are required to recover what is owed.

To help you understand the debt recovery process, we have put together a typical process we would follow:


The first step when taking on any case is to negotiate with the debtor, before going down the legal route. Sometimes, instructing a debt recovery agency can be just nudge your debtor needs to settle that outstanding invoice.

Negotiation doesn’t just stop at step one, any debt recovery agency worth their salt will continue to negotiate throughout all stages of this process.

Letter Before Action

If your debtor continues to ignore attempts to communicate with them or negotiations are unsuccessful, the next step is a ‘Letter Before Action’. This letter must be sent to your debtor before any legal proceedings to recover the debt are undertaken. The Letter Before Action is a final demand letter to request payment before proceeding with legal action, the letter will include:

  • The amount owed (the debt)
  • The date the debt should have been paid
  • Any interest to be paid
  • How long the debtor has to pay the outstanding monies before legal action is taken

A Letter Before Action could be enough to encourage your debtor to pay.

Legal Claim

If your debtor decides to ignore the Letter Before Action or you are not happy with their response, the next stage of the process is legal action. This will involve issuing legal proceedings through the County Court.

Once a claim has been lodged with the County Court, your debtor will receive a claim form requesting that they settle the debt. Your debtor will have 19 days to respond to the claim and they have three options:

  • Admit and pay the debt;
  • Enter back into negotiations to settle the debt;
  • Or, defend the claim


If your debtor fails to pay the debt owed to you, by the expiry date of the County Court Claim, the next stage is obtaining a County Court Judgment (CCJ).

A CCJ is the final decision by the Court that allows you to take enforcement action against your debtor, in order to collect the debt. If your debtor fails to pay the CCJ within 30 days of receiving the judgment, it will be registered and will impacted their credit rating. A CCJ remains on their record for 6 years.


Once a CCJ has been obtained, you can move into the enforcement stage of the debt recovery process. A High Court Enforcement Officer will attend your debtor’s premises to collect the debt or begin to remove goods to the value of the debt, if the debtor is unable to pay.

This is usually the stage when those debtors who have repeatedly ignored all communication, realise it’s time to settle the debt.

An alternative solution to issuing a County Court Claim is to begin insolvency action against your debtor. So, the following steps would be taken:

Statutory Demand

Should your debtor continue to ignore attempts to recover your debt after a Letter Before Action, a written and formal demand called a statutory demand can be made. A statutory demand can only be issued on debts exceeding £750.

Once a statutory demand has been served, your debtor will have 21 days to respond or face their business being forced into liquidation.

Winding Up Petition

If the statutory demand is unsuccessful, the next stage is a winding up petition. This is an application filed with the courts to request a hearing to establish if your debtor’s business is insolvent. If the winding up petition is successful, a Liquidator will be appointed to realise the assets and investigate the affairs of the company and its directors.


We know this process can seem overwhelming so, if you are considering instructing a debt recovery agency but are unsure what to expect, contact our team on 0800 009 6106 or hello@mydebtrecovery.co.uk and they will be happy to discuss your situation. We support our clients through every stage of the process.

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