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Articles Debt Recovery 29th Jan 2015

Debt Recovery Update: Fundamental changes to pursuing individuals for debts

A new debt protocol could be introduced in March 2015 which will radically change the way in which debt recovery claims are made. The protocol will apply to businesses claiming debts from individuals and will allow them at least 28 days to seek their own independent advice upon receipt of a letter before action. Furthermore the letter before action will need to include full details of the debt such as explaining whether the debt arises out of a written or verbal agreement and providing relevant copies of documents.

A more detailed letter before action will be required and the overall process will be more time consuming. Based on this we recommend that you take a look at your current bad debts and think about issuing your letters before action before March 2015.

Another change potentially coming into force in October 2015 is that the bankruptcy threshold could be increased from £750 to £5000. Currently a creditor can petition for a debtor’s bankruptcy so long as the debt is over £750. The threshold increase will radically change the way in which creditors can pursue debtors for receipt of funds as individuals will have a higher level of protection. If you have a debt of £750 or above again we suggest that you contact us before this new law comes into force.

Our debt team are highly skilled individuals who have an extensive debt recovery and bankruptcy experience. We are more than happy to discuss the new changes with you over the phone or by a face to face meeting.


The content of this page is a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.

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