How To Recover Debt From An Individual

Dealing with unpaid debts can be a stressful and challenging experience. In this article, we will explore the legislation you need to follow, when chasing for payment of debts from individuals. We will also provide tips for negotiating a repayment plan and how to protect yourself from debts arising in the future. 

What is the Pre-Action Protocol for debt claims?

If you are owed money by an individual or sole trader, the Pre-Action Protocol will apply. This means that you will need to follow the requirements set out in the protocol before you could consider issuing Court proceedings.

This protocol aims to encourage communication between creditors and debtors and hopefully a resolution, leaving Court proceedings as a last resort. It promotes early settlement and helps both parties understand their respective positions at the earliest stage possible. By following this protocol, it may be possible to resolve the issue without the need for costly legal proceedings.

If you are considering initiating debt recovery proceedings against an individual who owes you money, familiarise yourself with the Pre-Action Protocol. Understanding these guidelines can help streamline the process and increase the chances of reaching a satisfactory resolution.

Tips for Negotiating a Repayment Plan

Negotiating a repayment plan with someone who owes you money can be a delicate process. It’s essential to approach the conversation with empathy and understanding, recognising that unexpected financial difficulties can happen to anyone.

Start by initiating a discussion about the debt and finding out if there is any reason for non-payment. Often small issues can be the cause for delay in payment. If you can ascertain this early on and can resolve these issues, you may be able to obtain payment quickly and amicably.

When considering a repayment plan, the most crucial part is establishing what the debtor can regularly pay. If you seek payment of instalments at a higher rate than the debtor can afford, it is likely that they will default quickly and this may result in a breakdown of communication. If that happens, it is likely that you will have to incur the costs of issuing Court proceedings, which ultimately results in more costs for you and a delay in obtaining payment.

The key to achieving payment of the debt as quickly as possible with the least cost, is to work with the debtor. If you can maintain an amicable relationship, they are more likely to continue to communicate with you and try harder to maintain payments.

Bear in mind that an individual may not be able to afford payment at a level that you would ideally like and pushing for this will not help you recover the outstanding sums. It is important to set realistic amounts and deadlines for payments.

How to Protect Yourself from Debts Arising in the Future

One effective way of minimising the risk of late payments is by running credit checks on new and existing clients. This helps to establish clear boundaries from the offset. You may wish to set credit limits for customers/clients with a low to medium credit score or request payment of your invoices upfront.

Remember, you must have the consent of an individual to run a credit check against them and you should obtain this consent in writing and retain this for your records.

Another crucial step is to document all agreements in writing. A signed contract outlining each party’s obligations, agreed repayment terms and your entitlement to any additional interest etc in the event of non-payment, is very helpful. This means that there is less opportunity for any ambiguity about exactly what was agreed between the parties and therefore aid in a resolution pre-action. It also means that it will be a lot easier to demonstrate what was agreed, should you later need to take legal action.

You should ensure that you keep detailed records of all financial transactions and communications related to debts owed. These will likely be needed in the event that you have to issue legal proceedings.

A good credit control process is important to stay on top of recovering sums that are due. You can implement automated payment reminders or invoicing systems which will also help.

You should check that your terms and conditions are still relevant and in compliance with any change in the law as part of your annual review process and seek legal advice, when necessary to help safeguard your interests.

By following these proactive measures, you can minimise the risk of experiencing owed debt in the future and protect your financial well-being.


If you find yourself in a situation where you are owed a debt by an individual, it is essential to understand your rights and options. By following the Pre-Action Protocol for debt claims and negotiating a repayment plan, you can work towards resolving the issue fairly and efficiently.

25 June 2024