How to recover unpaid debt in the UK: a practical guide for contract creditors

How to recover unpaid debt in the UK

If a customer or counterparty has failed to pay under a contract, begin by sending a clear written demand and trying to resolve the matter without court — but if that fails, you can bring a money claim using Money Claim Online, apply for default judgment if the defendant does not respond, and then pursue enforcement (bailiffs, third‑party debt orders, attachment of earnings, charging order or insolvency) depending on the debtor’s circumstances. The government’s guidance on options before court and how to make and enforce a money claim explains the practical steps and limits.

The rest of this article explains when negotiation is the right choice, what a demand letter should contain, how to start and progress a claim in England & Wales (including default judgment), and the realistic prospects and costs of enforcement. I cite official HMCTS/GOV.UK and Civil Procedure Rules sources where they explain the formal procedures you will use.

Start where payment is still possible: negotiation, mediation and a written demand

Most commercial recoveries begin with a written demand. A useful demand letter names the contract, states the unpaid amount, sets out the factual basis (dates, invoices, works completed or deliveries made), attaches supporting documents and gives a clear deadline for payment. Make a contemporaneous record of how and when you sent it.

Mediation is commonly effective for disputed debts and the UK government explicitly recommends exploring alternatives to court before starting a claim; see GOV.UK’s overview of your options if you’re owed money for practical alternatives to litigation.Options if you're owed money

Why start here? It keeps costs down, preserves commercial relationships where possible, and removes procedural uncertainty (for example, whether the contract requires notice or a cure period). But be realistic: if the debtor lacks funds or refuses to engage, escalation is often needed.

When and how to start a court claim (Money Claim Online)

If negotiation fails, most straightforward money claims in England & Wales are started online using Money Claim Online (MCOL). The government’s step‑by‑step guidance explains eligibility, the information you must provide and associated fees.How to make a court claim for money

MCOL lets you issue a claim electronically, name the defendant, state the amount, and attach documents. There is official HMCTS user guidance for claimants that explains form fields, supporting evidence and service requirements — consult the Money Claim Online user guide before you start to avoid avoidable errors.MCOL user guide for claimants

A practical point: service must be correct. If the defendant is not properly served, you cannot obtain a default judgment and you may waste time and fees. Keep proof of service and follow the MCOL instructions closely.

Default judgment: what it is and how to obtain it

If the defendant does not acknowledge service or file a defence within the permitted time, you may apply for default judgment under the Civil Procedure Rules (CPR) Part 12. CPR Part 12 sets out the grounds and process for requesting a judgment without a contested hearing; there are exceptions and particular rules where the defendant is a child, bankrupt, or a defendant in certain insolvency proceedings.CPR Part 12 – Default judgment

Default judgment is a powerful tool because it converts the unpaid invoice or claim into an enforceable court order. But it can be set aside by the defendant if they show a real prospect of defending the claim or another good reason: expect that a sensible debtor will apply to set aside if there is a genuine dispute.

After judgment: realistic enforcement choices and limits

A judgment is not the same as payment. The government lists the enforcement methods available once you have a judgment and explains when each is appropriate.Enforce a judgment

Options include:

• Enforcement by bailiffs (writ/warrant of control) to seize goods — useful for debtors with tangible assets.
• Third‑party debt orders (freezing funds in a bank account) — fast when you can identify the debtor’s bank.
• Attachment of earnings orders (take from wages) — only where the debtor is employed and pays regular wages.
• Charging orders (secure the debt against property) — appropriate where the debtor has land or significant assets.
• Insolvency procedures (statutory demand, bankruptcy or winding up) — powerful but costly and only appropriate where the debtor appears insolvent.

Each route has practical and legal constraints: costs, the debtor’s ability to pay, and timescales. If the debtor has no visible assets or is resident overseas, enforcement may be difficult or uneconomical. The GOV.UK enforcement guidance summarises the trade‑offs you must consider.Enforce a judgment

Practical evidence and costs you should prepare for court and enforcement

Before starting a claim, assemble the documents that matter: the contract or terms, invoices, delivery notes, confirmation of works, correspondence showing the demand and any payments or admissions. Keep an audit trail of communications and dates; courts place weight on clear documentary sequences.

Be candid about costs. Court fees, enforcement fees (bailiffs, applications) and the time you’ll spend can exceed the debt if it is small. Use MCOL and the GOV.UK guides to estimate fees before you start.How to make a court claim for money

When to seek specialist help

If the dispute is high value, the debtor threatens insolvency, the facts are legally complex, or the debtor is outside England & Wales, seek regulated legal advice. Court staff can explain procedure but cannot give legal advice; official guidance flags when to consult a solicitor.Options if you're owed money

If you prefer a professionally drafted demand letter or help preparing the claim paperwork, services such as BeforeSuit can prepare dispute documents from information you supply; customers remain responsible for deciding whether and how to send them.

The pragmatic final word

Recovering unpaid contract debt is a sequence of decisions: attempt negotiation and mediation where it can save time and money; use a carefully drafted written demand and keep records; when those fail, pursue a court claim through Money Claim Online and consider default judgment if the defendant does not respond; and choose an enforcement route that fits the debtor’s assets and your appetite for cost. A judgment helps, but it is not always a payment guarantee — assess enforceability before you escalate.

For help preparing a professional demand letter, BeforeSuit can help you prepare your next steps.