Defending a claim of debt 

 
If you are being pursued for money you do not owe, or you feel that the other party has not followed the correct procedure, we can help you to defend yourself or your business against the claim.  
 
It may be tempting to ignore a claim that you feel is incorrect, but this could result in an unfavourable judgment and an increase to the debt. It is important that you respond as soon as possible, but also that you follow the correct procedure to defend against the debt. We can use our experience to make the process simple for you. 
 
You should only defend a claim if you have reasonable grounds of defence, otherwise you may face additional costs.  

When can I defend a claim? 

You have already paid the money being claimed 
The creditor has acted improperly or not followed correct procedure 
The time limit for recovering the debt has run out 
There is an issue with the signature on the agreement 
You agree that you do owe some money, but not the amount being claimed 

The Process of Defending a Debt Claim 

We can support you throughout the process and advise you about your options as the claim progresses.  
 
Remember that you can only defend a debt claim for one of the reasons listed above. If you do not have a valid defence you have no choice but to admit the claim and attempt to reach a settlement with the creditor. We can help you to negotiate this. 
 

How long does it take to resolve a debt dispute? 

We would expect it to take between 6 months and 1 year to resolve the dispute. It can take up to a year for disputed debts to be listed and heard in Court.  
 

What will it cost to make a claim through the courts? 

Our fees for defending a claim will be charged at an hourly rate. We will give you an estimate of the likely overall cost at the beginning of your claim, keep you up to date about costs throughout your case, and advise you if there are any complications in your case that may impact the overall cost.  
 

I owe the debt but I cannot pay it 

You cannot defend a debt simply because you cannot afford to pay it. If this is the case, you should negotiate with the creditor to agree a plan to pay off the debt in amounts that you can afford.  
 
Usually creditors will be willing to discuss an agreement as, for them, being paid back over a longer period time is a better outcome than not being paid at all. We can support you to negotiate with your creditor to reach an agreement that is manageable for you. 
 
Remember that your liability for debts will depend upon the structure of your business and, if you are part of a partnership, your agreement with your partners. If you are unsure about your liability for business debts, get in touch for advice.  
Respond to the Letter Before Action 
 
Your creditor will have sent you a ‘letter before action’ (also known as a letter of claim) because they want to start legal action. The letter before action will give you a specified period to respond depending on whether you are an individual, a sole trader, or a limited company. If you are an individual you should receive a reply form included with the letter before action. You need to complete and return this to the creditor within the time specified.  
 
Once a claim has been issued, reply to it as early as possible, even if you disagree you owe the debt. If you don’t reply, you might be taken to court for a debt you don’t owe. It will be harder to challenge the decision at a later stage and might end up costing you money to correct it. 
 
If you need longer than the time specified to fill in the defence form, fill in and return the ‘acknowledgement of service’ form, which gives you additional time to respond. We will help you to fill in forms correctly. 
 
You need to explain why you don’t think you owe the other party money, or why you don’t agree with the amount being claimed. You may also dispute the claim because you feel your creditor hasn’t acted properly, and you should explain why. For example, if your creditor hasn’t warned you of the debt or they’ve started legal action too quickly. 
Mediation 
 
Once written details of the dispute have been filed, the Court will issue an Allocation Questionnaire, gathering information to help decide where and when the case should be heard. This questionnaire gives the parties an opportunity to request the matter be ‘stayed’ for a period, usually 28 days, to allow the parties to communicate and attempt to reach a settlement.  
 
Parties may choose to negotiate directly or through their solicitors, or to use a mediator. For debts under £5,000 the Courts offer a Small Claim Mediation Service free of charge. Where the debt is over the value of £5,000, parties wishing to use a mediator must instruct an independent mediator and agree how to divide the cost between them. 
Trial 
 
If the claim can not be settled, the matter will proceed to trial. Proceeding to trial is an expensive route, so the value of the claim should be taken into account when proceeding to a final hearing. Witness evidence in person is often requested and depending on the nature of the dispute, experts may also be called. Depending on the complexity of the case, Counsel may also be instructed. 
 

Get in touch 

Do you have a legal matter you'd like to discuss with us? Get in touch using the details below or use the form here and a member of our team will be in touch to discuss your enquiry. 
Phone: 0121 452 5130 
Address: Spencer Shaw Solicitors Limited 
Vancouver House, 111 Hagley Road, Edgbaston, Birmingham B16 8LB 
Opening hours: 
Monday - Friday 9:00AM - 5:00PM 
Saturday, Sunday & Bank Holidays - Closed 
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