If a friend, family member, ex-partner, customer or business owes you money in the UK and refuses to pay, you have several legal routes available, ranging from a firm written demand to a County Court claim or even bankruptcy proceedings. This guide walks through what each option involves, what it costs, and when to use it, so you can decide what to do next with confidence.
Key takeaways
- You can take legal action to recover almost any unpaid debt in the UK, even without a written contract, provided you can prove the debt exists.
- The cheapest, fastest options (a firm written demand, then mediation) resolve most disputes before court.
- You normally have six years from the date the debt became due to make a claim.
- The police will not get involved in a straightforward unpaid debt; it is a civil matter, not a criminal one.
- For most personal debts under £10,000, a small claims court application is the realistic next step.
Step 1: Start with a clear, written demand
Before any formal action, write to the person who owes you. Keep the tone firm but civil and set it out in writing (an email is usually enough at this stage), so you have a paper trail later.
Your letter or email should state:
- Exactly how much is owed
- The date the debt arose and what it was for
- A payment deadline (commonly 7 to 14 days)
- A clear consequence if it is not paid by the deadline (you will consider formal recovery action)
Many disputes end here. People often pay, or come back with a payment plan, once they realise you are taking it seriously.
Step 2: Try mediation before going to court
If the debtor refuses outright, denies the debt, or simply ignores you, mediation is almost always cheaper and faster than court. An independent mediator helps you both agree a way forward, often by phone or video in a single afternoon.
Outcomes typically include full immediate repayment, a partial settlement, or an instalment plan. Mediation costs vary, but commonly start around £100 to £300 per party for a small civil dispute. That is far less than the court fees, solicitors’ time, and stress of formal litigation.
A short conversation with a dispute resolution solicitor at this stage is also useful: a properly drafted "without prejudice" offer of mediation puts pressure on the debtor and helps later if you do end up in court.
Step 3: Send a formal Letter Before Action
If mediation fails, or the debtor refuses to engage, the next step is a Letter Before Action (sometimes called a Letter Before Claim).
This is a formal pre-court notice required by the courts under the Pre-Action Protocol for Debt Claims.
What a Letter Before Action must include
- The exact amount owed, including any interest
- A clear explanation of why the debt is owed
- A reference to any agreement or contract, written or verbal
- A reasonable deadline to pay or respond (commonly 30 days for individuals, 14 days for businesses)
- A warning that court proceedings may follow if there is no satisfactory response
- An information sheet and reply form (mandatory when writing to an individual debtor)
Failing to follow the protocol can affect the costs you can recover in court, so get this drafted properly.
Step 4: Issue a statutory demand (for undisputed debts)
If the debt is undisputed and above the threshold, a statutory demand is a powerful next step. It is a formal demand for payment with a strict 21-day deadline.
If the debtor does not pay or apply to set the demand aside within those 21 days, you can use the demand as the basis for bankruptcy (against an individual) or a winding-up petition (against a company).
Statutory demand thresholds
- £5,000 is the minimum debt to issue a statutory demand against an individual.
- £750 is the minimum to issue a statutory demand against a company.
A statutory demand should be drafted by a solicitor. A defective demand can be set aside on technical grounds and may leave you liable for the debtor’s costs.
Step 5: Make a County Court claim (small claims and beyond)
For most personal debts, the County Court is the realistic route. You can issue a claim online through Money Claim Online or via your local court. Claims under £10,000 are handled on the small claims track, which is designed to be navigable without a solicitor.
Court fees you will pay
Issue fees depend on the amount of the debt. They start at around £35 for very small claims and scale up; for a £10,000 claim, expect to pay roughly £455.
What happens after you win: enforcement options
A court judgment (a CCJ) does not automatically get you paid. If the debtor still refuses, you have several enforcement options:
- Warrant or writ of control: instructing County Court bailiffs (or High Court Enforcement Officers, for judgments of £600 or more) to attend the debtor’s address and seize goods.
- Attachment of earnings order: for an employed debtor, deductions come directly from their wages.
- Third-party debt order: freezing money the debtor holds in a bank, or that a third party owes them.
- Charging order: securing the debt against the debtor’s property, payable when the property is sold or remortgaged.
Each option has its own application process and fee. A solicitor can advise which is most likely to recover the money based on what the debtor owns.
Step 6: Apply for bankruptcy or a winding-up petition
If a statutory demand has expired unpaid and the debt is large enough, you can petition the court to make the debtor bankrupt (for individuals owing £5,000 or more) or to wind up the company (for companies owing £750 or more).
Both are serious, expensive steps. Court fees plus a deposit run to several thousand pounds in total, and there is no guarantee you will recover the full debt: if other creditors are involved, you will share the proceeds. They are most useful where the debtor has assets and the threat of insolvency is enough to prompt payment.
For tailored advice, speak to our corporate insolvency solicitors.
How do I prove someone owes me money without a contract?
You do not need a signed contract to recover a debt in England and Wales. Verbal agreements are legally enforceable; the challenge is evidence.
Useful evidence includes:
- Bank transfers showing the money leaving your account and reaching theirs
- Text messages, WhatsApp messages, emails or letters chasing or acknowledging the debt
- Witnesses to the original loan or agreement
- Records of any partial repayments
- Evidence of your income and savings at the time, showing the money was lent (not gifted)
- Invoices, receipts or unpaid bills
The strongest case combines two or more of these to show that money changed hands, on what terms, and that the debtor has acknowledged the debt at some point.
Can I go to the police if someone owes me money?
In almost all cases, no. An unpaid debt is a civil matter, not a criminal one. The police will not intervene to make someone repay you and will normally signpost you to Citizens Advice.
There are two exceptions:
- Fraud: if the person obtained the money by deception (for example, a false promise, fake identity or scam), report it to Action Fraud.
- Threats or harassment: if you are being intimidated by the debtor (or anyone acting on their behalf), contact the police on 101, or 999 in an emergency.
How long do I have to claim money I’m owed?
Under the Limitation Act 1980, you generally have six years from the date the debt fell due (or from the last written acknowledgement or part-payment) to start a claim. After that, the debt is statute-barred and you cannot enforce it through the courts.
A few categories have different time limits: mortgage shortfalls have a 12-year limit, and certain personal injury claims must be brought within three years. If your debt is approaching its sixth anniversary, act quickly. A written acknowledgement or a partial payment from the debtor can restart the clock.
Is it worth pursuing the debt? A quick cost-benefit check
Before you spend money chasing money, work through five questions:
- Can the debtor actually pay? A judgment against someone with no assets and no income may be unenforceable.
- Do you have evidence? Without records, your claim will be much harder to win.
- What will it cost? Add up likely court fees, solicitor’s time, and your own time off work.
- What is the personal cost? Pursuing a family member, ex-partner or close friend can permanently damage the relationship.
- How much is left after fees? If the debt is £200 and the realistic recovery cost is £150, mediation or writing it off may be the better call.
A 15-minute conversation with a debt recovery solicitor will usually give you a clearer answer than a week of agonising over it.
Frequently asked questions
Can I sue someone who owes me money without a contract?
Yes. Verbal agreements are enforceable in England and Wales, provided you can prove the loan or agreement existed. Bank statements, messages and witness evidence often stand in for a written contract.
What happens if someone refuses to pay after a small claims judgment?
You can apply to enforce the CCJ through bailiffs, an attachment of earnings order, a third-party debt order, or a charging order on their property. A judgment also damages the debtor’s credit record for six years, which often prompts payment by itself.
Can I take a family member or ex-partner to court for money they owe me?
Yes. The law treats personal loans between family members or ex-partners the same as any other debt. The harder question is usually whether it is worth the relationship and emotional cost: mediation is often preferable.
How do I recover money from a friend without ruining the friendship?
Start with a calm, written reminder and offer a realistic repayment plan. If that fails, mediation keeps the dispute confidential and gives both sides a structured way to settle without involving a court.
Is it illegal to refuse to pay back a personal loan in the UK?
Not as a crime, no, but it is a civil wrong. A debtor who refuses to pay can be taken to court, have a CCJ entered against them, and ultimately have assets seized or wages deducted to satisfy the debt.
How Preston Redman can help you recover what you’re owed
Recovering money owed to you, especially from someone you know personally, is rarely just a legal question; it is also a practical and personal one. Our dispute resolution and business recovery solicitors regularly help individuals and businesses across Bournemouth and the South of England work through this, from a single letter before action to enforcement of a CCJ or a winding-up petition.
For an initial conversation about your options, contact our corporate insolvency partner, Tim Flower, by calling 01202 292424, or use our contact form to request a callback. You can also use our simple interest calculator to work out exactly how much you are owed, including statutory interest, before you decide what to do.
