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Letter Before Action

In simple terms, a Letter Before Action (LBA) (also known as a Letter of Claim), is a formal letter requesting payment of a debt owed to your business. It warns your Debtor that failure to pay will result in the imminent issue of Court proceedings and further enforcement action. It clearly sets out the amount to be paid and a timeframe for clearing the debt, which is usually seven days.

It is reassuring to know that an LBA can be sent for as little as £12.50 using Debt-Claims’ online Debt-Claims Solicitors portal, and most debts are cleared at this stage of the process with no further action.

An alternative course of action at this stage could be a Late Payment Demand, in which the debt owed is requested. The Debt-Claims Solicitors team will advise you on the best course of action.

Three reasons our LBA is so effective

  1. Many companies who have been ignoring persistent requests for payment will begin to take notice when they receive official correspondence from a team of debt specialist solicitors. Engaging with a debt collection service like Debt-Claims Solicitors shows that you are serious about reclaiming the money owed to your business.
  1. Outlining the legal consequences of ignoring a debt is often enough to recover the money owed. If proceedings are issued the Debtors will have no alternative but to deal with the claim or instruct legal representation of their own, at a considerable cost to their business. It is not surprising that most companies want to avoid this process and instead, choose to clear the debt.
  1. If you are struggling with cashflow due to a number of unpaid debts, reclaiming money through the use of LBAs is a highly cost-effective route, getting your business back on track quickly and with minimal financial impact.

Since October 1st, 2017, recovering debt from a sole trader (or individual) must be in accordance with the Pre-Action Protocol for debt claims. You can read about this protocol here.

How effective is your Letter Before Action?

There is no guarantee that a LBA will generate a positive response, and further action may be required. That said, in our experience, a formal letter from a debt collection service rarely goes unnoticed.

What if I want to charge interest?

The Debt-Claims portal enables you to claim interest (and other costs/compensation) in both our Late Payment Demand and LBA. Of course, there is no obligation to claim interest if you do not want to.

What other sums can I recover?

Under the Payment of Commercial Debts (Interest) Act 1998, Debt-claims can help you to recover not just interest, but also compensation of between £40 – £100 per invoice plus any additional costs incurred during the debt recovery process. Your Debtor would be responsible for all your costs.

Pre-Action Protocol guide

We are happy to share our knowledge with our clients.

Click here to download our user friendly Pre-Action Protocol Summary.

View & download

Ready to prepare and send your Letter Before Action?

Register Here

Send a Late Payment Demand by email only
Prices starting
from £2.50

Send a Letter Before
Action by post and email
Prices starting
from £15.00

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