A Letter Before Action (LBAs) or Late Payment Demands are very cost-effective means of recovering your outstanding invoices. An effective LBA will contain sufficient information for the debtor to understand, and investigate the debt that is being claimed and the consequences should prompt payment not be made. In order for an LBA to be efficient it is important to include specific information. We shall advise you of the information necessary and will use our experience and expertise to present this information in the most appropriate and professional manner. An LBA can be used to secure payment or to obtain a response from your customer before the commencement of a claim through the County Courts.
Timely use of an LBA will usually achieve a swift response and often prompt payment from a debtor but, of course, results will depend upon:
- What prior credit control processes have been employed;
- When the letters are used;
- The information contained within the letters;
- If there is a genuine dispute regarding the debt;
- The current credit worthiness of the debtor; and/ or
- The age of the debt.
Late Payment Demands
An alternative to an LBA is a Late Payment Demand which allows you to claim Interest and Compensation under the Late Payment of Commercial Debts (Interest) Act 1998.
If we are unable to recover your debt through an LBA or Late Payment Demand, where appropriate, we will recommend follow-up litigation action through our panel solicitors. We will never commence any legal proceedings without discussions with the client who will always be kept informed.
A powerful alternative to issuing a Claim is to start insolvency proceedings. You can only do this for debts of £750 or more. To examine the pros and cons of Claims or Insolvency click here.