Pre-Action Protocol for Debt Claims: the 30-day rule explained

The Pre-Action Protocol for Debt Claims governs every case where a business chases a debt from an individual in England and Wales. It fixes what the letter of claim must say, requires an Information Sheet, Reply Form and Financial Statement to be enclosed, and gives the debtor 30 days from the date at the top of the letter before proceedings can start.

Who it applies to

Paragraph 1.1: the protocol applies to any business — including sole traders and public bodies — claiming payment of a debt from an individual, and an individual includes a sole trader. It does not apply to business-to-business debts unless the debtor is a sole trader, and it does not apply where another protocol covers the debt (construction and engineering, mortgage arrears) or to HMRC claims under Practice Direction 7D.

So: limited company chasing a consumer — protocol. Limited company chasing another limited company — Practice Direction on Pre-Action Conduct only. Individual lending to a friend — Practice Direction only.

What must be in the letter of claim

Paragraph 3.1(a) lists the information: the amount of the debt; whether interest or charges are continuing; the details of the agreement (for an oral agreement, who made it, what was agreed as far as possible in the words used, and when and where; for a written one, the date, the parties and a note that a copy can be requested); assignment details if the debt was bought; why any instalment offer already made is not acceptable; how to pay and how to discuss payment; and the address for the Reply Form.

Paragraph 3.1(b) then requires one of: an up-to-date statement of account including interest and charges; the most recent statement plus the interest and charges added since; or, if no statements were ever provided, the interest and charges added since the debt was incurred, stated in the letter.

Paragraphs 3.1(c) and (d) require the Information Sheet and Reply Form at Annex 1 to be enclosed in all cases, together with a Financial Statement form — the Standard Financial Statement, which the debtor uses if they need to propose instalments.

The mechanics creditors get wrong

• Date it at the top of the first page and post it that day, or the next at the latest (paragraph 3.2).
• Send it by post. You may email it as well; you may only email it instead if the debtor has explicitly asked that post not be used and given other details — a clause in your standard terms does not count (paragraph 3.3).
• Wait 30 days from the date at the top before issuing, allowing for a reply posted near the end of the period (paragraph 3.4).

What happens after the debtor replies

The protocol keeps running:

• Debt advice. If the debtor says they are seeking advice, allow reasonable time — and do not issue less than 30 days after the completed Reply Form, or 30 days after you provide requested documents, whichever is later (paragraph 4.2).
• Documents. If the debtor asks for a document or information, provide it or explain why you cannot, within 30 days (paragraph 5.2).
• Instalments. Where the debtor asks for time to pay, try to agree a plan based on their income and expenditure, having regard to the Standard Financial Statement. If you refuse their proposal, give reasons in writing (paragraph 4.4).
• A partial Reply Form counts as engagement. Contact the debtor and fill in the gaps rather than treating it as no reply (paragraph 4.5).
• ADR. If you still disagree, both sides must consider alternative dispute resolution — negotiation, mediation, or the Financial Ombudsman where the debt is regulated under the Consumer Credit Act 1974 (paragraphs 6.1-6.3).
• Agreed repayment. While the debtor keeps to an agreed plan, do not issue. If you later need to, you must send an updated letter of claim and comply with the protocol afresh — though documentation sent in the previous six months need not be sent again unless it needs updating (paragraph 6.4).
• Taking stock. If the debtor replied but no agreement was reached, give at least 14 days' notice of your intention to issue before you do (paragraph 8.2).

The cost of ignoring it

Paragraph 7.1: the court will expect compliance and will take non-compliance into account when giving directions. It looks at compliance in substance — minor or technical infringements are not the target, especially where the matter is urgent — but the sanctions in paragraphs 13 to 16 of the Practice Direction on Pre-Action Conduct are real: a stay of the claim while the missed steps are taken, an adverse costs order even against a successful claimant, and interest reduced or disallowed.

For a business issuing debt claims at volume, that arithmetic is worse than it looks: a non-compliant template applied across a hundred claims produces a hundred stays.

Do not confuse the deadline with limitation

Six years from the date the debt fell due, under section 5 of the Limitation Act 1980. The protocol's 30 days sit inside that period and do not extend it. If limitation is close, issue the claim — the court can stay proceedings for the protocol steps to be completed, but it cannot revive a time-barred debt. A written acknowledgment or a part payment by the debtor does restart the clock (sections 29-30).

Build a compliant letter

Our guided letter before action detects when the Debt Claims protocol applies to your facts, then enforces it: 30 days minimum, the Annex 1 enclosures, postal service, the statement-of-account requirement, and the interest basis you are actually entitled to claim.

→ Letter before action

Related: letter before action — contents, notice period and costs risk.