An unpaid invoice ties up cash and attention. The good news is that most commercial debts are recovered without ever reaching a courtroom — provided you go about it in the right order.
Start with a proper letter before claim
A formal letter before claim that complies with the pre-action protocol resolves a great many debts on its own. It sets out what is owed, why, and what will happen if it isn’t paid, and it signals that you are serious. Many debtors who ignore reminders pay when a proper letter arrives.
Claim the interest and compensation
On commercial debts you are entitled to statutory interest and a fixed compensation sum under the late payment legislation — unless your contract provides a substantial remedy of its own. Many businesses never claim either, which is money simply left on the table. It also strengthens your position, because it increases the cost to the debtor of continuing not to pay.
Check they can actually pay first
Before spending money on proceedings, it is worth establishing whether the debtor has the means to pay. A judgment against a company with no assets is worth nothing, and the cost of obtaining it is lost. This quick check is the most useful thing to do before escalating.
If it goes to court
For an undisputed debt, obtaining judgment is usually straightforward. The real work is enforcement — and judgment is the beginning of that, not the end. Options include bailiffs, a charging order against property, attachment of earnings, or a third party debt order against a bank account. Which one works depends entirely on what the debtor has.
When not to use a statutory demand
A statutory demand is powerful against a debtor who can pay but won’t. But used against a business that genuinely disputes the debt, it can backfire — the demand can be set aside with costs against you. Disputed debts belong in ordinary proceedings, not insolvency procedures.