Debt - you're owed money

Find out more about the law and your rights if you're owed money.

Summary of the law - Debt Disputes (You’re owed money by a friend/partner)


What are your rights?


If you had an agreement, and you have carried out your part of the deal (such as lend them money) you are entitled to force the other person to comply with the terms of the agreement.

  • This could be an agreement to lend someone money on the basis they will pay it back (with or without interest).
  • This could be an agreement with a customer that in exchange for providing a service to them they will pay you an agreed sum of money.

Ideally there will be a written record of what was agreed – such as confirming it is a loan (not a gift) and when they were to pay it back. It should also cover whether you were charging them any interest.

If there was no written agreement, there may still be other proof of what was intended. Perhaps emails or texts sent between you at the time of the loan.  A text saying “thank you for lending me the £3,000 darling. I promise you’ll get it all back soon” would be ideal.

There may be other evidence, perhaps a friend of you both was present when you discussed the arrangements and would be prepared to write a letter to you confirming what they remember about the loan.

Even if there is no evidence, you could still (in theory) use the small claims court. If the other person does not decide just to pay you back then it would go to a hearing and the judge would listen to you both.

You would need to try to persuade a judge that you transferred the money and it was ‘more likely than not’ that the transfer of money was a loan rather than a gift.

However there are steps to take before court action:

  • Call the person and appeal to their sense of fairness – perhaps offering to have the money back in installments.
  • Send a formal complaint letter (see sample letter)
  • Try mediation
  • If all else fails use the small claims court (claiming not only the money lent but also the court fees, a small sum towards legal advice and interest at the court rate of 8% from when you should have been repaid).

All of these are explained on our website and guides.

The area of law is known as Contract Law and your claim would be for a breach of contract.  

What evidence should you collect together?


Any of the following could help you prove your case:


  1. Any written agreement about the money.
  2. Any other written evidence that show what you both intended or had agreed (such as emails or text messages sent at the time).
  3. A letter (or statement) from a friend or acquaintance who was present when you and this person agreed the arrangements for the loan and can say what they heard you both discuss.
  4. Had the money been lent and paid back before? If it had any proof of this would show you already had an established routine and the same terms would apply this time.
  5. Can you show that you had never made large gifts of cash to this person before?
  6. If you don’t have much money, it would help your case to provide details of your income, outgoings and any savings to show it was unlikely that the money would have been a gift.


What can you claim?


The full amount you are owed

Any interest that it was agreed would also be paid

If you are forced to use the small claims court you can also claim back the court fees, a small contribution towards the cost of legal advice and interest (even if you had not agreed to charge interest) at the court rate of 8% every 12 months from the date the loan should have been repaid.


What is the deadline for starting a claim at court?


You will need to start your claim before the deadline (called the  limitation date) , which for breach of contract claims the time limit is six years from the date the other person broke the agreement.


Example claims


A former partner, friend or family member owing you money.



Disclaimer reminder


Please note: To give you general information about your dispute, the information given here is a simplification of a complex area of law and cannot be relied upon. As part of our commitment to serving you better, we highly recommend utilising the resources available at the Money Advice Service website. Their comprehensive guides and information cover various aspects of financial and legal matters, including small claims court procedures and may be able to give you the support you need.


Format - complaint letter(Debt )



Information to include

Sample letter – Debt Dispute


Start of official letter to person who owes you money.

[If you know the person’s name]: Dear Jane or Dear Miss Smith,


[If it is a business and you do not know their name]: Dear Sirs,,



Any relevant background information:

What was agreed between you?

What happened (in date order)?

Be specific and refer to any written or verbal agreements.  



In January 2013 we agreed that I would loan you £3,000.

The reason was that you needed to help pay off your credit card debts.

As your boyfriend at the time, I agreed to this loan as I wanted to help you.

We did not have a written agreement.

However you specifically promised me that that you would pay it back to me within 1 year.

I accepted this promise as I trusted you. On the basis of this verbal agreement I transferred the money to you.

We separated on 22nd June 2013. The year has now passed and still, to date, you have not paid any amount back to me. 




Details of any payments requested and any payments made.


The full agreed amount of £3,000 was transferred by me direct to your NatWest Bank account (Account Number:……… Sort Code:………) on 3rd January 2013.

If this is disputed I can provide proof of the transfer.



Identify clearly why you are unhappy.

Give any relevant dates

Be clear about why you think the other person is responsible.


You have chosen to ignore my emails and texts to date requesting the monies owed to me.

This money was lent to you in good faith based on our verbal agreement. It was not a  gift.



Be as clear as possible about the remedy you would like.

  • Say what action you would like them to take (or stop).
  • Where you are asking for a payment - put a price on the you seek.


I would ask that you repay the amount loaned in full, £3,000 within 14 days.

Please either send me a cheque to my home address or transfer it direct to my HSBC account (Account Number:……… Sort Code:………).




Give your opponent 14 days to reply to the letter – to  either:

  •  agree with your complaint and give you the remedy that you seek


  • arrange to inspect the problem


  • set out their detailed response.



Please do not ignore this letter. I would like us to try to resolve our dispute without court proceedings and legal costs.

Please reply in the next 14 days, so that this dispute can be resolved as set out in this letter.

If you do not agree that you owe me this money  and/or do not agree with the remedy sought, then please reply within 14 days with a detailed explanation of why not.





Point out that ignoring your letter will mean you may start legal proceedings for the court to deal with the dispute and that you may refer the judge to your letter.



I am sure it will not prove necessary but if I do not hear from you within 14 days then I reserve the right to start court proceedings without further reference to you. I will ask the court for an order that you pay me £3,000.

If I do have to issue court proceedings, I will refer the court to this letter and I will also ask the court to order you to pay me interest, court fees and legal costs.

I look forward to hearing from you within the next 14 days.



[If you started with their name]:

Yours sincerely,

Ian Rate

[If you started using Dear Sirs]:

Yours faithfully,

Ian Rate


Expert legal advice you can rely on:

Expert legal advice you can rely on,
get in touch today

Please let us know you are not a robot