If you have looked into the debt recovery process, you will know that there are a number of steps that can be taken to ensure that your money is recovered as quickly as possible. One of the key things to do is to send your debtor a Letter Before Action, which is the first step in the formal debt recovery process. A Letter Before Action is a notice sent to let the debtor know that you are planning to take legal action against them, unless they repay their debt as soon as possible. It’s one step on from simply requesting payment, and the last opportunity a debtor has to pay before court proceedings can be started.
What is a Letter Before Action?
A Letter Before Action – sometimes referred to as simple an ‘LBA’ – is a formal letter that requests a debtor to repay the money that they owe to your business. It details what you are owed and provides a set time period for them to pay, which is usually seven days. A Letter Before Action is a key part of the debt recovery process, and it’s one of the last attempts to recover the debt before legal action takes place.
Before beginning any legal proceeds, such as taking your debtor to court, you must send a Letter Before Action. In a lot of cases, a Letter Before Action is enough to encourage a debtor to repay what is owed before matters go any further.
Benefits of Letter Before Action
There are a number of benefits that come with sending a Letter Before Action, which is why it’s something that our experts recommend. A Letter Before Action shows that you are serious, and that you intend to take further action if the money is not repaid. It shows a debtor that you are not simply going to ignore the money that they owe, nor are you going to let them get away without paying. With a Letter Before Action, they know that you are keen to take matters further if the money is not recovered quickly.
How Effective are Letters Before Action?
Letters Before Action are a very effective way of recovering debts. This is because they are hard for a debtor to ignore as they know that if they do, they could end up being taken to court, which is something everyone wants to avoid. When you send a Letter Before Action, you are giving a debtor one last chance to pay before you start court proceedings, and this is often enough to convince them that their time is up. Once a lot of debtors receive a Letter Before Action, they immediately become a lot more willing to pay.
To find out more about recovering debts and issuing a Letter Before Action, get in touch with our helpful team. At Cobra Financial, we are always on hand to help with debt recovery.
