From the 1st of October 2017, new legislation came into effect, which affected how debt claims would be conducted and has since shown to slow down the speed of recovering money from debtors. The new legislation is called The Pre-Action Protocol for Debt Claims (The Protocol), so what do this mean?

The Protocol would affect any individual or business (including sole traders and public bodies) which are claiming payment of a debt from any individual (including sole traders). The new Protocol does not apply to business – to – business claims.

There are quite a few negative points for creditors including that the new Protocol throws out the standard Letter Before Action (LBA) where in the past you can request payment within 7 days and if it’s not received, issued a claim at Court. Unfortunately, the Protocol allows the debtor a substantial amount of time which will now be a minimum of 30 days for a response.

So what happens?

A creditor will have to send the debtor a full and detailed Letter of Claim outlining what the debt is for, how the debt arose, interest being charged and any other relevant details. The full letter of claim will have to be extremely detailed and it will also be required to include a Reply form, financial forms for the debtor to complete and documentation which will support the debt.

What is a Reply Form? The reply form is the debtor’s response to the claim and should contain as much detail as to whether the debt is disputed and if so why. If the debt is admitted, then financial evidence should be included and any offers of payment detailed. Whether the debtor does this however is another matter. The debtor will then be given 30 days to respond. This does not mean agreeing to repay the amount, this can simply mean just completing the Rely Form sent with either an acknowledgement of the amount, questioning the amount or asking for further information or completely disputing the amount. Further bad news is that once acknowledgement has been sent by the debtor, the creditor still cannot do anything for at least a further 30 days. Time also has to be provided for the debtor to seek advice.

If, however the debtor does not respond to the letter of claim then the creditor is free to begin Court Proceedings but only after the 30 day period and by giving 14 days notice of proceedings.

Do not wait to get your debts in order!

We at Maxwell Hodge Solicitors are fully experienced when dealing with debt recovery. Should you require our services please contact us now on 0151 526 9321 or email