It is often possible to avoid the time and expense of going to court by pressuring a debtor for payment. This can be done by issuing a letter before action, which will demonstrate a serious intent to the debtor. This letter will usually demand payment of the debt within seven days and warn that legal action will be used. A letter before action can be issued by a solicitor for added authority. If this method does not work, and the debtor is able to settle the debt, then it may be necessary to go to court.
The court system has different processes depending on the size of the debt. For simple disputes, where the amount disputed is below £5,000, the best, and cheapest option, is the small claims court. The first step is completing the claim form and submitting it to the local County Court. The debtor is then sent a response form to which they must reply within 14 days. If they do not respond, or admit the money is owed, then the court will often give summary judgment. Otherwise, if the case is defended, it will need to be heard by a judge. Proceedings at this level are relatively informal and will generally not involve complicated points of law.
An alternative to the small claims track in the County Court is making a claim through the Court Services website. The website
can be used when the claim is unlikely to be disputed and the amount claimed is below £15,000. This method can only be used where the claim is straightforward.
In more complicated cases, and for claims over £5,000 but under £15,000, the usual method of recovery is through the County Court, but this time using the 'fast-track' process. Amounts over £15,000 are normally dealt with on the 'multi-track' in the County Court. The stages involved for both of these tracks will be highly dependent on the complexity of the case and what the judge decides is appropriate. For amounts over £50,000 the case will normally dealt with by the High Court, although in complex cases it can decide about smaller amounts.
Once a judgment has been obtained, it will often be necessary to take enforcement action to obtain money from the debtor. There are three main types, each aimed at different parts of the debtor's assets: their salary, their savings and their property. A warrant of execution will give the court's bailiffs the right to enter the debtor's home or place of business to obtain payment or goods of equivalent value. A third party debtor order can be attached to the debtor's bank account to freeze it and allow payment from there. A charging order can be made over the debtor's assets - this stops the debtor from selling their property without paying what is owed.