A debt recovery process exists in England and Wales. It is essential that any person owed a debt follows this process in order to regain the lost funds. A failure to follow this procedure could have the courts siding with the debtor and thus you will not be awarded the funds you are owed. There are four steps to the debt recovery process.
The first step is the Debt Reminder Letter. This letter is going to open the door for the debtor to contact you. The letter will state they are late, and you would appreciate prompt action. The letter states they have 7 or 14 days, depending on your preference, to make payment or other arrangements.
The second step is the Late Payment Chaser Letter. The document is a firmer request for funds, giving them another seven days to comply before other action is taken. The third step can be used by you or the debtor. The Debt Settlement Letter will state that you are willing to make arrangements for full or partial payment that may suit the debtor if they cannot pay the account in full in the time you have allotted. It can also be used to respond at any time to your requests for money by the debtor. The debtor can send out the letter with the terms they can afford or to indicate their willingness to pay with a change in schedule.
Once these three letters have been used you are able to send out the Debt Recovery Letter. The Debt Recovery Letter is the final phase before you turn the issue over to the courts and let them decide. The letter will be thorough and explicit in your next action regarding the recovery of the debt owed. It will state what will occur if the debtor refuses to acknowledge or make the payment you are requesting.
At this point in the debt recovery process you are now able to demand interest along with the debt. If the debt is £1000 and you require interest the debtor would have to make a larger payment than the original debt. The Commercial Debt Regulation of 2002 states you can demand up to 8 percent over base rate interest from the time the payment was due to the date is it paid in full. If you have been working to recover the debt for eight months this means you can charge 8 percent from that first month up to the time the debt is finally paid. It helps to encourage the debtor to make payment, so as to avoid the extra fees or incur court fees.
About 72 percent of debt recovery issues are settled out of court as a result of the Debt Recovery Letter. For a small fee you can purchase the template Debt Recovery Letter from our site. This letter is completely customizable and can be reused at any time since it is saved to your computer. You may also purchase this letter as part of the debt recovery package.