Debt Recovery Letter



Use our Solicitor drafted debt recovery letter template as a final demand for payment of a debt before issuing a claim.

  • 72% of debt recovery matters actually settle on the issue of a final demand for payment.
  • Drafted by Debt Recovery Solicitors in plain English and easy to customise.
  • Includes Late Payment of Commercial Debts Regulations interest claim wording.
Price £2.95

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Debt Recovery Letter

The debt recovery process exists to protect you and your business when debts arise. There is a 4 step process that should be followed to try to recover the money owed before taking the matter to court. Court proceedings can be expensive and time consuming so it is best to try to resolve matters outside of the courts where possible.

The Debt Recovery Letter is a final demand for payment before you issue a court claim. The letter clearly sets out what will happen if the debtor refuses to acknowledge the debt or make payments to clear it.

The other three steps that should be taken before sending out the Debt Recovery Letter involve sending a  Debt Settlement Letter which enables you prove to the court that you have tried to negotiate with the debtor to reach a compromise in how payment is to be made, a Debt Reminder Letter and a Late Payment Chaser Letter.

In the Debt Recovery Letter you may state that interest is required to be paid on the money owed, along with the full amount of the debt. The Late Payment of Commercial Debt Regulations 2002 states that interest can be charged up to 8% of the full amount of the debt owed. The interest is accrued from the date the payment was originally due, not from the date of the final demand. Requesting interest can act as a good incentive to encourage the debtor to pay before the debt increases further, the longer it is owed. Before you can claim any interest you must state your intentions to do so in the Debt Recovery Letter. The Debt Recovery Letter template has a section to enable you to set out the interest that you may wish to charge.

Using the Debt Recovery Letter

Our Debt Recovery Letter template can easily be customised to ensure that you are happy with it before it is sent to the debtor. You can take out information such as the interest to be added onto the debt if you wish as you do not have to ask for interest. You can also make changes to other parts of the letter if they need to be more specific.

Associated Documents

Our Guide to Settling Business Debts on Ceasing to Trade can provide debtors with useful information on how to meet their liabilities.