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- Debtor: A debtor is an individual or organisation that owes money to another party. The letter is addressed to them, and they are being asked to settle the unpaid balance.
- The person, company, or other organisation to which the debt is owed is known as the creditor. In order to collect the debt from the debtor, they are the ones who are requesting payment and starting the letter before claim.
In the letter you provided, the creditor is represented by their solicitor (or the creditor themselves if no solicitor is involved), and they are writing to the debtor to demand payment.
Dear [NAME(S) OF ADDRESSEE(S)],
Re: [CREDITOR’S NAME] – Debt Claim
We are instructed by [FULL NAME OF CLIENT], of [ADDRESS], to seek payment of the outstanding debt from [you OR NAME OF SOLE TRADER]. This letter is sent in compliance with the Pre-action Protocol for Debt Claims (the “Debt Protocol”) under the Civil Procedure Rules (CPR). In particular, we refer you to paragraph 7 of the Protocol and paragraphs 13 to 16 of the Practice Direction on Pre-action Conduct and Protocols, regarding the court’s authority to impose sanctions for non-compliance.
Reason for the Debt
[Summarise the reason for the debt claim, explaining why the creditor believes the debtor is liable, with a clear outline of the facts.]
On [DATE], [you OR NAME OF DEBTOR] entered into a [written OR oral] agreement with [our client OR NAME OF ORIGINAL CREDITOR]. This agreement set out specific terms, including [DETAIL PRINCIPAL TERMS AND, FOR ORAL AGREEMENTS, INCLUDE KEY DETAILS]. In breach of this agreement, [PROVIDE DETAILS OF BREACH OR INCIDENT]. [Any additional parties to the agreement should be named here]. The debt was subsequently assigned to [our client] on [DATE].
Payment Status
[Include any details of ongoing payments or instalments and the reason they are unacceptable, explaining why legal action is being considered.]
As of now, [you OR NAME OF INDIVIDUAL OR SOLE TRADER] owe our client a sum of £[AMOUNT], plus interest, which has been calculated as [EXPLAIN INTEREST CALCULATION] from [START DATE]. Additionally, you owe [SPECIFY ADDITIONAL CHARGES AND REASONS]. The total amount now due is £[TOTAL AMOUNT], payable immediately and exclusive of legal costs. Interest continues to accrue at a rate of [PERCENTAGE]% per day.
Relevant Documentation
Enclosed are copies of the following documents relevant to the debt:
- [LIST THE DOCUMENTS ENCLOSED WITH THIS LETTER]
Documents Required from You
Please provide the following documents along with the completed Reply Form, which we believe are relevant to the debt and in your control:
- [LIST THE REQUIRED DOCUMENTS]
This list is not exhaustive, so please include any other documents you consider relevant, as per paragraph 4.1 of the Debt Protocol. We request you take appropriate steps to ensure all relevant documents are preserved in line with CPR Practice Direction 31B.
Payment Information
The debt can be paid via [DETAIL PAYMENT METHOD AND ADDRESS]. For any discussions regarding repayment, please contact us at [PROVIDE CONTACT DETAILS]. Free independent advice and assistance are available from organizations listed in the enclosed Information Sheet.
Funding Arrangements
Please note that our client has obtained [INCLUDE ANY THIRD-PARTY FUNDING, CONDITIONAL FEE ARRANGEMENTS, OR INSURANCE DETAILS IF APPLICABLE].
Alternative Dispute Resolution
We invite you to consider [DESCRIBE PREFERRED ALTERNATIVE DISPUTE RESOLUTION METHOD, IF ANY] and welcome your agreement on this approach.
Proposed Expert
We propose the following expert(s) be jointly instructed in the field of [SPECIFY FIELD] to address [SPECIFY ISSUE]:
- [LIST PROPOSED EXPERTS]
Next Steps
Please respond to this letter with the completed Reply Form, Financial Statement, and requested documents within 30 days of the date on this letter [SPECIFY DATE].
Failure to respond may lead to our client initiating court proceedings to obtain a judgment against [you OR NAME OF INDIVIDUAL OR SOLE TRADER], potentially increasing your liability for costs.
Yours faithfully,
[NAME OF CREDITOR ]
