A customer has gone quiet on an invoice. You have sent two polite chasers and one firmer one. Nothing. This is the decision tree a UK creditor should run, in order, without skipping steps.

Step 1 · Confirm the debt is actually due

Before escalating, confirm three things in writing. One, the invoice amount and date. Two, the contractual payment terms or, if absent, the implied thirty‑day term under the Late Payment Act. Three, that the goods or services were delivered to the debtor's satisfaction, or that the debtor did not raise a specific complaint before the due date.

If any of these is genuinely in doubt, the debt may be disputed, and a different approach is required. If all three are clean, proceed.

Step 2 · Send a formal chaser citing the Act

The most common mistake creditors make is chasing politely, indefinitely. The right move at thirty days overdue is a single letter, sent to the debtor's registered office and to their finance contact, that:

  • Identifies the invoice by number and date
  • States the amount outstanding
  • Notes that, under the Late Payment of Commercial Debts (Interest) Act 1998, statutory compensation and interest at eight per cent above the Bank of England base rate are now due
  • Calculates the specific compensation (£40, £70, or £100) and a running interest figure
  • Gives a seven‑day payment deadline

This is the letter that separates you from every other supplier chasing the same debtor. It is calm, specific, and numerically exact. It signals that you know your entitlements and you intend to invoke them.

About sixty percent of debts settle after a well‑drafted statutory chaser. The key words are well‑drafted: generic templates do not land the same way.

Step 3 · Letter Before Action

If the formal chaser is ignored, the next letter is a Letter Before Action (LBA), compliant with the Practice Direction on Pre‑Action Conduct. The LBA sets out the creditor's intention to issue county court proceedings if the debt is not paid within fourteen days, and attaches a schedule of the sums claimed under the Act.

An LBA is not a threat in the abstract: it is a procedural precursor to litigation, and courts expect the parties to have engaged with it before proceedings start. A debtor who ignores an LBA and then finds themselves defending a claim will face adverse costs consequences even if they later pay the principal.

Step 4 · Consider a statutory demand

For undisputed debts over £750, a creditor may serve a statutory demand on the debtor under section 123 of the Insolvency Act 1986. If the debtor does not pay or apply to set the demand aside within twenty‑one days, the creditor may petition to wind the debtor up.

Statutory demands are powerful and should be used carefully. They are not the right tool where the debt is genuinely disputed, because a disputed statutory demand can result in the creditor being ordered to pay the debtor's costs of setting it aside. Used correctly on an undisputed debt, however, a statutory demand brings almost every debtor to the table within a fortnight. Nothing focuses a director's mind quite like the prospect of their company's winding‑up petition being advertised.

Step 5 · Instruct a commercial debt recovery firm

If you have reached this point without resolution, or if you prefer not to handle any of the above yourself, this is the moment to hand the matter to a specialist. A commercial recovery firm does three things you cannot easily do:

  • Issues the demand on its own letterhead, which carries more weight with the debtor than a further letter from the creditor
  • Invokes Regulation 5A of the Late Payment Regulations to add its recovery costs to the sum demanded, so the cost does not fall on the creditor
  • Has a ready referral path to a panel solicitor for litigation, which the debtor's finance team knows is credible

A good recovery firm will assess the matter without charge and decline cases that are genuinely disputed or uneconomic. Rafferty & Maze accepts undisputed UK commercial debts over £1,000 between limited companies or LLPs, and responds with an assessment within twenty‑four working hours.

Step 6 · County court proceedings

If the debt is unpaid after the demand sequence and the debtor has shown no signs of settling, the next stop is the county court. For debts under £10,000, proceedings are issued in the small‑claims track, which is designed to be handled without lawyers and where costs recovery is limited. Above £10,000, the fast track applies, and the solicitor's costs of bringing the claim are recoverable from the debtor if the claim succeeds.

Most commercial debt matters that reach the issue stage settle before judgment, once the debtor understands that a CCJ will be registered against them and that the principal amount will now include interest and costs.

Step 7 · Enforcement

If judgment is obtained and remains unpaid, enforcement options include an attachment of earnings order, a third‑party debt order, a writ of control (High Court enforcement officers), or a charging order on property. Which route is right depends on what the debtor owns and what the judgment sum is.

In practice, few commercial debt matters reach enforcement. The vast majority settle at one of the earlier stages. The point of working the sequence systematically is that each stage applies more pressure than the last, and each stage closes the debtor's exits.

Do it yourself, or instruct us

You can run this entire sequence yourself. The Act is the Act; the procedure is public; the letters are straightforward to draft. If you have the time, the stomach, and the continued customer relationship to manage, self‑handling works.

The alternatives are to instruct a solicitor (expensive on small matters, correct on larger ones) or a commercial recovery firm (economical across most sizes, fast, and you are not the one sending the letters). If you are reading this page, you have probably already decided which route you prefer. Instruct us and we will handle the rest.