Letter before action for an unpaid debt – template
Courts expect you to write to the other side before you issue a claim. Give them a clear deadline – usually 14 days – and keep proof that you sent the letter.
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What next?
Letter before action for an unpaid debt – what you need to know
A letter before action (also called a letter before claim) is the last formal step before you take someone to court for money they owe you. In England and Wales, the courts expect both sides to exchange information and try to settle before a claim is issued – if you skip this step, the court can penalise you, for example by refusing to award you some of your costs.
What to include
- who owes the money, how much, what it is for and when it was due;
- a clear deadline to pay – 14 days is usually treated as reasonable between individuals;
- a request to reply if they dispute the debt, and an invitation to consider mediation;
- what you will do if they do not pay – issue a claim at the County Court.
If a business is chasing an individual
When a business (including a sole trader) claims a debt from an individual, the Pre-Action Protocol for Debt Claims applies. The letter must give the debtor 30 days to reply and must enclose the protocol’s Information Sheet and Reply Form. This template is aimed at debts between individuals and between businesses.
Interest
- Between individuals the court can award statutory interest at 8% a year on a County Court claim.
- Between businesses the Late Payment of Commercial Debts (Interest) Act 1998 allows interest at 8% above the Bank of England base rate plus fixed compensation of £40, £70 or £100, depending on the size of the debt.
Next step: Money Claim Online
If the deadline passes without payment, you can issue a claim online through Money Claim Online for amounts up to £100,000. Claims up to £10,000 are usually dealt with in the small claims track, where you do not normally have to pay the other side’s legal costs if you lose.
Frequently asked questions
How long should I give them to pay?
Between individuals, 14 days is normally reasonable. If you are a business chasing an individual, the Debt Claims Protocol requires 30 days.
Do I have to send a letter before action?
It is not a legal requirement to start a claim, but the court expects it. Skipping it can cost you some of your costs or interest.
How should I send it?
By post with proof of postage (or recorded delivery) and by email if you have one. Keep a copy.
Can I claim interest?
Yes. On a County Court claim you can usually ask for statutory interest at 8% a year, or Late Payment Act interest between businesses.
This template is for general information and is not legal advice. It reflects the law of England and Wales as at October 2026. Check that it fits your situation before signing and take legal advice in unusual cases.