International LBA (Letter Before Action)
Unpaid invoices can be a major source of concern for businesses. Not only does this kind of debt damage your cash flow, but it also diverts your time and resources away from the core functions of running your business and securing new clients and opportunities.
When you face an unpaid invoice, one of the first steps towards recovering that debt is to issue what is known as a Letter Before Action (LBA). This can be a cost-effective way to recover your money.
What is an LBA?
The LBA is an official letter that notifies the debtor of the beginning of court proceedings if the debt is not paid or reasons for non-payment not given, within a time limit.
In essence, the LBA is the creditor or someone acting on their behalf, such as a debt collection agency or solicitor making the debtor aware that legal action can be taken. It is issued before court action is initiated and is the final demand before taking the issue further. It differs from the late payment letter, which usually includes reference to late payment compensation.
What should an LBA contain?
The layout of the LBA can vary but there are a number of standard points that are usually covered in this type of letter:
• Your business contact details
• Full detail of the debt owed, along with costs and interest
• A date by which payment should be made or non-payment reasons provided
• A deadline date for reply based on the relevant legal guidance in that country
• A notification that court action will proceed if there is no response
This list is not definitive and the format of the LBA will vary based on a number of factors, most notably, the jurisdiction under which the debt is being pursued.
Recovering an international debt can prove trickier than chasing a debt within the UK. It often requires the assistance of an agency with experience in debt recovery in that particular country.
An LBA sent outside of the UK will more likely to have an impact if it is produced in the relevant language, using the right tone and communication style. Getting the tone and content of your international LBA right can be difficult if you have no experience operating a business in that country. That is why many businesses, faced with the need to recover an international debt, will turn to a specialist debt recovery agency, with international experience.
We can draft an international LBA that is in compliance with the rules and regulations of the country you are focused on. Our international LBAs are worded in an optimum manner to ensure the highest possibility of successfully influencing your overseas client and cutting short the debt recovery cycle.
What comes after the LBA?
Once your international LBA has been issued, the debtor will have until the deadline to give their response. At this point, legal action may have to commence if the debtor does not respond. A well crafted LBA can form an important part of the debt recovery action and in most countries, it is an essential first step towards debt collection.
If you are seeking to recover an international debt, and you feel that you are at the stage when an LBA could be necessary, get in touch with us. We can advise you on the best way to proceed and help you to employ the LBA method to successfully secure repayment of the debt.
CLI is a Debt Recovery Agency established in Kent and specialising in debt recovery, international debt collection and international Letter Before Action. CLI is a member of the TCM Group, International Debt Collection network.