Learn how to recover money owed to you in the UK with this step-by-step guide covering letters before action, small claims court, and more.

How to recover money owed to you in the UK

Whether a friend has failed to repay a loan, a trader has done shoddy work, or a business owes you an invoice, being owed money is stressful and frustrating. The good news is that the UK legal system gives individuals and small businesses a structured, relatively affordable route to pursue what they’re owed — without needing a solicitor. This guide walks you through the key steps, from sending your first formal letter to taking a case to the small claims court, so you can approach the process with confidence.

—

Understanding your options before taking action

Before diving straight into legal proceedings, it’s worth taking a moment to assess the situation clearly. Ask yourself:

• How much money is owed? Amounts up to £10,000 in England and Wales (£5,000 in Scotland, £3,000 in Northern Ireland) can be handled through the small claims process, which is designed to be accessible without legal representation.
• Do you have evidence of the debt? Contracts, invoices, receipts, text messages, and emails all strengthen your position considerably.
• Is the other party likely to pay if pressed? Sometimes a formal letter is enough to prompt payment without any further action.
• Is the debtor traceable and solvent? Winning a court judgment is only useful if the other party has the means to pay. It’s worth considering this before investing time and money in a claim.

Understanding where you stand will help you choose the most proportionate and effective course of action.

—

Step 1: Try to resolve it informally first

Courts expect parties to have made a genuine attempt to resolve disputes before legal action begins. This is part of what’s known as the Pre-Action Protocol, which sets out how both sides should behave before proceedings start.

Start with a clear, written communication — an email or letter — setting out:

1. What is owed and why

2. Any relevant dates or agreements

3. A reasonable deadline for payment (typically 7–14 days)

4. Your intention to escalate if payment isn’t received

Keep a copy of everything you send. Even if the other party ignores you at this stage, having a paper trail demonstrates good faith if the matter later goes to court.

—

Step 2: Send a letter before action

If your informal approach doesn’t work, the next step is to send a formal letter before action (sometimes called a letter of claim or LBA). This is a formal written notice that tells the other party you intend to take legal action if they don’t settle the debt.

A well-drafted letter before action should include:

• A clear statement of what you’re claiming and the total amount owed
• Any interest you intend to add (more on this below)
• A final deadline — usually 14 days for consumer disputes, or 30 days for more complex business claims
• A statement that you will issue court proceedings if payment is not received

The letter serves two important purposes: it gives the other party one last chance to pay, and it demonstrates to a court that you followed the correct pre-action steps.

You can use the ClaimsPilot letter before action tool to generate a professionally worded LBA tailored to your situation — no legal knowledge required.

—

Step 3: Calculate what you’re owed, including interest

Before filing a claim, make sure you know exactly how much you’re seeking. In many cases, you’re entitled to add statutory interest on top of the original debt.

• For business-to-business debts, the Late Payment of Commercial Debts (Interest) Act 1998 allows you to charge 8% above the Bank of England base rate.
• For county court claims, the court can award interest at 8% per annum under the County Courts Act 1984.
• For consumer disputes, interest is at the court’s discretion.

Working this out manually can be fiddly, particularly if the debt has been outstanding for a long time. The ClaimsPilot interest calculator does the hard work for you, calculating exactly how much interest has accrued and producing a figure you can use in your claim.

—

Step 4: File a small claims court case

If the letter before action doesn’t result in payment, and the debt falls within the small claims limit, the next step is to file a claim through the court system.

In England and Wales, you can do this online through Money Claim Online (MCOL), which is run by HM Courts & Tribunals Service. It allows you to submit a claim, pay the court fee, and manage your case digitally.

How the process works

1. Submit your claim — You’ll provide details of who you’re claiming against, the amount, and a brief summary of your case.

2. Pay the court fee — Fees are based on the value of the claim and range from around £35 for claims under £300 up to £455 for claims up to £10,000. You may be able to reclaim this fee if you win.

3. The defendant is notified — The court sends the claim to the other party, who then has 14 days to respond.

4. They admit, defend, or ignore — If they admit the claim, you can request a judgment. If they defend it, the case will be allocated to a hearing. If they ignore it, you can apply for a default judgment.

5. Attend a hearing if needed — Small claims hearings are informal and designed for people without legal representation. A district judge will hear both sides and make a decision.

For claims in Scotland, the process differs slightly — you’ll use the Simple Procedure through the Scottish Courts and Tribunals Service. In Northern Ireland, you would apply to the Small Claims Court through the Northern Ireland Courts and Tribunals Service.

—

Step 5: Enforce your judgment if necessary

Winning a judgment is a significant step, but it doesn’t automatically mean the money appears in your bank account. If the other party still refuses to pay after a court order has been made, you will need to take steps to enforce it.

Options available in England and Wales include:

• Warrant of control — County Court bailiffs can attend the debtor’s premises and seize goods to the value of the debt.
• Third-party debt order — This can freeze money held in the debtor’s bank account and redirect it to you.
• Attachment of earnings order — If the debtor is employed, the court can instruct their employer to deduct the owed amount directly from their wages.
• Charging order — If the debtor owns property, this places a charge on it, meaning the debt must be paid if the property is sold.

Enforcement does come with additional fees, and success depends on the debtor having assets or income. The GOV.UK guidance on enforcing a judgment provides a full overview of your options.

—

Tips for a stronger claim

Whatever stage you’re at, a few good habits can significantly improve your chances of success:

• Keep records of everything — Contracts, invoices, delivery confirmations, correspondence, and any promises made verbally followed up in writing are all valuable evidence.
• Stay professional in all communications — Aggressive or emotional messages can undermine your credibility in court.
• Act promptly — There is a six-year time limit (five in Scotland) on most debt claims under the Limitation Act 1980, but acting sooner is always better.
• Be realistic about costs — Small claims are designed to be low-cost, but consider whether the amount owed justifies the time and court fees involved.
• Don’t ignore a defence — If the other party disputes your claim, read their response carefully and gather any additional evidence that addresses their points.

—

Ready to take the first step?

Recovering money you’re owed doesn’t have to be a daunting process. With the right approach — starting with clear communication, sending a formal letter before action, and using the court system if needed — you stand a good chance of resolving the matter effectively.

ClaimsPilot is designed to make this process straightforward. From generating a letter before action to calculating interest and helping you prepare your case, our tools guide you through each stage without needing expensive legal advice.

Start your claim with ClaimsPilot today →

—

This guide is for informational purposes only and does not constitute legal advice. If your situation is complex or the sums involved are significant, consider consulting a qualified solicitor.