Wondering if someone owes you money what can you do legally? If attempts to resolve the debt amicably aren’t successful, you can issue a formal complaint letter known as a statutory demand. If the debt remains unpaid after 21 days, you have the option to file a money claim with the County Court. Bringing a claim to court is easier with CaseCraft.AI. The simple, secure platform makes it easy to prepare documents, compile evidence, and track your claim as it progresses.
How to recover debts owed to you
If you need to know how to take legal action if someone owes you money, follow these steps to request repayment amicably, initiate mediation, or progress to court proceedings:
Step 1: Gather evidence. Recovering debt is easier when there is a written record of what was agreed between you and your debtor. Ideally, you will have a written agreement stating the amount to be loaned, which account the money was paid into, and any repayment terms. Emails and texts that confirm you provided your debtor with funds they failed to pay back are also very helpful.
Step 2: Seek an amicable agreement. Contact the business or person in your debt and state your claim. Offering to accept payment installments may make it easier for your debtor to pay you back and increase the likelihood of your debt being settled out of court. If an agreement is reached, ensure you document the terms and have a witness observe signatures.
Step 3. Try mediation before taking legal action for someone who owes you money. An impartial third-party mediator will help you and your debtor to agree on a reasonable resolution, which might be immediate repayment, partial payment, or a payment plan being put in place. Anything discussed in mediation can’t be used in court later on.
Step 4: Send a formal complaint letter (statutory demand). The statutory demand should be addressed to your debtor and include any relevant information about the agreement between you, such as dates and loan amounts, as well as details of any payments requested and made. You should state your complaint, clarify why you think the other person is responsible, and outline the amount you would like repaid, into which account, and by when. Your debtor will have 21 days to pay once they receive your statutory demand letter, after which you can issue a money claim at the County Court.
Step 5. Go to the County Court. Are you wondering whether or not you can take legal action if someone owes you money? The answer is yes – 21 days after issuing your debtor with a statutory demand, you can make a money claim at the County Court for the full amount owed and any agreed-upon interest. There is no minimum amount you can claim, but as court fees can cost anywhere between £35 and £10,000, you should ensure that the debt is worth pursuing before proceeding.
If you successfully obtain a court judgment against your debtor, you can take enforcement action using an attachment of earnings order or charging order. You can also instruct a bailiff or High Court Enforcement Officer to collect the debt or seize goods equal to the worth of the debt. Bailiffs can only be instructed where the judgment sum is for £600 or more. Bear in mind that enforcements carry costs, and your debtor may not have goods equal to the amount that they owe you.
What can you claim if you end up in small claims court for a debt dispute?
When you go to small claims court to recover a debt, you can claim the full amount you are owed, as well as any agreed interest. You can also claim for court fees, legal costs, and interest at the court rate of 8% from when you should have been repaid.
Wondering what happens if you lose in small claims court? You will be liable for your legal fees and court fees. You will also be unable to enforce the collection of your debt. To avoid losing in small claims court, ensure that you provide ample evidence of money owed and attempts to recover funds, including issuing a statutory demand.
When should I consider making someone bankrupt for owed debts?
You can start bankruptcy proceedings against someone who owes you £5,000 or more after attempts at an amicable resolution have failed and 21 days have passed since a statutory demand was issued.
When can I seek to liquidate a company for outstanding debts?
You can apply to have a company be wound up or liquidated if they owe you £750 or more, and you can prove that they cannot pay you back.
How can I recover money owed from bankruptcy or liquidation proceedings?
To recover funds you are owed from a bankrupt person or a company being liquidated, you must register as a creditor. If funds are available to settle debts, you may receive a portion. If there are insufficient funds to repay your debt, or another debt takes precedence, you may be unsuccessful in recovering funds, even with a bankruptcy order. It is also essential to consider the costs if you lose in small claims court before deciding whether to make a claim, as you will be liable for court and legal fees if you lose, which can range from £35 to £10,000.
How can I recover debts from individuals or businesses in foreign countries?
Need to know what can you do legally if someone owes you money and is in another country? Debt recovery overseas can be complicated due to differences in laws and jurisdictions. Before taking action, it is best to speak to a specialist debt solicitor.
How can I prove someone owes me money?
A signed contract outlining how much money is owed and the date it should have been repaid is the best evidence of an outstanding debt. Other evidence of debt could include unpaid invoices, bounced cheques, and communications that show you chasing the debt.
Can I involve the police if someone owes me money?
The police will not help you recover debt, as debt cases are considered a civil matter. The police may direct you to Citizens Advice or advise you to speak to a specialist solicitor.
What is the time limit for claiming money owed?
Wondering if someone owes you money what can you do legally, and how long do you have to claim money you are owed? In most cases, you have 6 years to make a claim for unpaid debts under the Limitation Act 1980. After 6 years have lapsed, the debt may be statute-barred if you have not made a claim, meaning that your debtor may not have to pay you back.
If you decide to file a money claim against your debtor, CaseCraft.AI’s intuitive case management platform makes it easy to prepare documents, track your case, and stay compliant. You don’t need any specialist legal knowledge to use CaseCraft.AI, and you can rest assured that your confidential information is secure, thanks to enterprise-level security.
