Starting legal proceedings should always be the last resort when it comes to debt recovery. That’s because reminding a debtor of his or her responsibilities, along with the potential consequences of not paying, is often enough to secure compliance. In the final stage of correspondence this is done through a document known as a letter before action, or LBA.
However, if a matter still ends up in court, you will help your case by showing that you took all reasonable steps to avoid taking legal action. This is where a good LBA can help you even if it failed to secure payment beforehand.
You see, a well written LBA will also contain a number of important details in order to give the debtor little or no room for manoeuvre when attempting to defend the action.
Sounds difficult? Well don’t worry because help is at hand. To make sure you get your LBA right, Lovetts Solicitors compiled a list of 12 things to include, and here it is:
- Ensure you use the correct address so the debtor cannot deny receiving the LBA.
- If sending an LBA by email, always get a delivery and read receipt to evidence the correspondence.
- Use a reference code that is easily identifies you and relates to your admin’ system.
- Similarly, always use a reference that relates to you within the debtor’s admin’ system if you have one.
- Be certain that you use the correct date.
- Make it absolutely clear that your aim is debt recovery.
- Always specify the exact amount that is outstanding.
- Notify how the debtor can contact you in case the amount owed is disputed.
- Include a payment deadline and explain the consequences of failing to pay.
- Also include any details of additional debt recovery fees, interest and/or compensation.
- Remind the debtor that any CCJ, if issued, will affect their credit rating.
- Specify how and where the payment should be made.
With these 12 important points included you should be able to construct an LBA that ticks all the right boxes. Alternatively, your solicitor may be able to send an LBA on your behalf. Or you can download the Lovetts LBA template by simply registering with The Late Payment Directory for free and accessing it in the ‘My Resources” area.