debtor-ladder

---
name: debtor-ladder
description: Turns a list of unpaid invoices into a dated ladder of steps, each one with the wording to send, the person to send it to and the day it goes, separating business debtors from consumers because the law treats them differently, and pricing the statutory interest and fixed compensation correctly where they apply. Use when a function balance is still outstanding, when an account customer has stopped paying, or when the chasing has drifted into awkward silence.
---

# Get the invoice paid without losing the customer

You give this the unpaid invoices with their dates and terms, who the customer is, what has already been said to them and by whom. You get back one ladder per debt: five or six dated steps from a quiet reminder to a formal letter, the exact wording for each one, the statutory interest and fixed sum where the debtor is a business, the protocol steps and timings where the debtor is an individual, and a stop line saying which debts should go to a solicitor rather than up another rung. It sends nothing, it charges nothing, and it will not put a made-up late fee on a consumer invoice.

## What it does

1. **Sort every debt into business debtor or individual debtor before writing a word, because the two are different jobs.** A company, a partnership or a public body that booked a function, took an account or bought catering is a business debtor: the Late Payment of Commercial Debts (Interest) Act 1998 applies. A private customer who owes a wedding balance is an individual, the Act does not apply, and the Pre-Action Protocol for Debt Claims does. The Protocol says so in its first paragraph: it "applies to any business (including sole traders and public bodies) claiming payment of a debt from an individual (including a sole trader)" and "does not apply to business-to-business debts unless the debtor is a sole trader". A sole trader sits in both, so treat a sole trader as an individual for procedure and as a business for interest.

2. **Fix the date the debt actually became late, from the document rather than from memory.** Where terms were agreed, the agreed date governs. Where nothing was agreed, GOV.UK states the position: "the law says the payment is late 30 days after either: the customer gets the invoice [or] you deliver the goods or provide the service (if this is later)". Terms longer than sixty days for a business transaction are possible but "it must be fair to both businesses", and thirty days is the ceiling for a public authority. Write the late date and the source of it on every row. Half of all stalled chases are stalled because nobody can say what was agreed, and the customer knows it.

3. **Check the invoice is actually chaseable before chasing it.** Was it sent to the person who authorises payment, not to the person who booked the room. Does it carry a purchase order number where the customer's system requires one. Does it match what was agreed, including any deposit already held, and does it show VAT correctly. Is there a dispute nobody escalated, such as a service complaint on the night. An invoice that will not pass the debtor's own accounts payable check is not a late payment, it is an admin failure, and sending a firmer letter about it makes the venue look careless rather than serious.

4. **Build the ladder as dated rungs, each with a named sender and a stated purpose.** A workable shape for a business debtor: day 1 after the due date, a short statement of account by email to the accounts contact, no tone at all. Day 7, a phone call to a named person, logged with what was said and what was promised. Day 14, a written reminder from the owner naming the amount, the due date and the date payment is now expected. Day 21, notice that statutory interest and the fixed sum will be applied from a stated date. Day 30, a formal letter before proceedings. Each rung goes out on its date whether or not the last one was answered. The ladder works because it is predictable, not because any single message is clever.

5. **Price the statutory interest correctly for business debts, and only for business debts.** The rate is "8% plus the Bank of England base rate for business to business transactions". Read the base rate on the day and show the sum: annual interest divided by 365 gives the daily figure, multiplied by the days late. Two conditions matter. You cannot claim statutory interest "if there's a different rate of interest in a contract", so read your own terms first, and a badly drafted late payment clause of your own can cost you the statutory rate. And a lower rate cannot be used against a public authority.

6. **Add the fixed sum, which most venues never claim and always could.** Section 5A(1) of the 1998 Act: "Once statutory interest begins to run in relation to a qualifying debt, the supplier shall be entitled to a fixed sum (in addition to the statutory interest on the debt)." The amounts, from GOV.UK: £40 where the debt is up to £999.99, £70 from £1,000 to £9,999.99, and £100 for £10,000 or more. Section 5A(2A) goes further: "If the reasonable costs of the supplier in recovering the debt are not met by the fixed sum, the supplier shall also be entitled to a sum equivalent to the difference between the fixed sum and those costs." State the fixed sum on the day 21 rung, per invoice, not per customer.

7. **For an individual debtor, never invent a late fee, and use the protocol's own shape instead.** This is where venues get it wrong most expensively. The statutory rate is not available against a consumer, and a contractual interest rate that high has been held unfair: the CMA records a case in which "a clause requiring a consumer to pay interest at 8% above the Bank of England base rate on sums due to a trader was found to be unfair, even though it constituted a genuine pre-estimate of damage and was not a penalty at common law". So the consumer ladder carries no interest unless the venue's own terms carry a rate that would survive a fairness test, which is a question for the owner's solicitor. What it carries instead is the protocol timetable, which is worth more.

8. **Write the letter of claim to the protocol's contents list, or do not call it one.** For an individual debtor the letter must contain the amount of the debt, "whether interest or other charges are continuing", and, where the debt came from an oral agreement, "who made the agreement, what was agreed (including, as far as possible, what words were used) and when and where it was agreed", which is exactly the conversation about a wedding balance that nobody wrote down. It must give details of how the debt can be paid and where the reply form goes, enclose an up-to-date statement of account, and enclose the Information Sheet, the Reply Form and a Financial Statement form from the Protocol's annexes. It "should be clearly dated toward the top of the first page" and "should be sent by post". Then stop: "If the debtor does not reply to the Letter of Claim within 30 days of the date at the top of the letter, the creditor may start court proceedings." If they reply asking for time or saying they are getting debt advice, the creditor "should not start court proceedings less than 30 days from receipt of the completed Reply Form or 30 days from the creditor providing any documents requested by the debtor, whichever is the later", and where agreement is reached, at least 14 days' notice is required before proceedings if it later breaks down.

9. **Say which debts come off the ladder, and keep the relationship where it is worth keeping.** Three exits. A disputed debt goes to a conversation and, if it holds, to the owner's solicitor, because a firmer letter on a disputed invoice is how a small argument becomes a counterclaim. A debt from a customer worth more than the debt goes to a payment plan with dates in writing, because "the creditor and debtor should try to reach agreement for the debt to be paid by instalments" is also how a venue keeps a Christmas account it will want next year. And a debt from a customer who is not coming back goes up the ladder without softening. Record which exit each debt took and who decided, so the next person to open the file is not starting the argument again.

## Then it checks

1. Every debt is marked business debtor or individual debtor, with a sole trader marked as both, and the ladder built for it uses only the steps allowed for that category.
2. Every row carries a late-from date and the document it came from, and where no terms were agreed the date is thirty days after the later of delivery and the customer receiving the invoice.
3. No consumer debt carries statutory interest, a fixed sum, or any late fee that is not in the venue's own written terms.
4. Every business debt claiming interest shows the base rate used, the date it was read, the daily figure and the day count, and confirms the venue's own terms carry no different rate.
5. Every fixed sum is in the correct band for that invoice and is stated per invoice.
6. Every letter of claim to an individual contains all the items the Protocol requires, encloses the Information Sheet, Reply Form, Financial Statement and statement of account, is dated at the top, and the ladder allows the full thirty days from that date before anything further happens.

Any check fails: name it, redo that step once. Failed twice: say what is wrong and stop.

## Rules
- Public information only.
- Never invent a fact, a number or a quote.
- Anything sent in someone's name says whose name it is. The day 14 rung goes out over the owner's name and the owner reads it first.
- Never send anything. This produces drafts, dates and a log. The owner sends, and decides what to send.
- Refuse to add interest, a late fee, an administration charge or a debt recovery cost to a consumer invoice where the venue's written terms do not contain it. A charge invented after the event is not recoverable and it hands the customer a reason to dispute the whole debt.
- Never threaten anything the venue is not going to do, never mention a court claim on a rung below the letter of claim, and never use the words bailiff, blacklist or credit rating. A threat that is not carried out teaches the next customer that the ladder is theatre.
- Never chase a debt that is disputed as though it were undisputed. A dispute goes sideways to a conversation, not up a rung.
- Never carry a debt up the ladder without checking whether the invoice was sent to the right person and matches what was agreed. Most silent invoices are not refusals.
- This output is a working document prepared for the owner to check against their own invoices and terms, and for the owner's solicitor to check before any letter of claim is sent or any proceedings are started. It applies published legislation and the published pre-action protocol to draft correspondence; it is not legal advice, and it is not a view on whether a debt is recoverable.

## Built from
- GOV.UK, "Late commercial payments: charging interest and debt recovery: When a payment becomes late", https://www.gov.uk/late-commercial-payments-interest-debt-recovery, no publication date shown on the page, read 16 September 2026: the thirty day default and the sixty day and public authority limits in step 2.
- GOV.UK, "Late commercial payments: charging interest and debt recovery: Interest on late commercial payments", https://www.gov.uk/late-commercial-payments-interest-debt-recovery/charging-interest-commercial-debt, no publication date shown on the page, read 16 September 2026: the 8 per cent plus base rate figure, the daily calculation and the rule that a contractual rate displaces it, all in step 5.
- GOV.UK, "Late commercial payments: charging interest and debt recovery: Claim debt recovery costs on late payments", https://www.gov.uk/late-commercial-payments-interest-debt-recovery/claim-debt-recovery-costs, no publication date shown on the page, read 16 September 2026: the £40, £70 and £100 bands and the debt thresholds in step 6.
- Late Payment of Commercial Debts (Interest) Act 1998, section 5A, https://www.legislation.gov.uk/ukpga/1998/20/section/5A, read 16 September 2026: the entitlement to the fixed sum in 5A(1) and the additional reasonable costs in 5A(2A), quoted in step 6.
- Ministry of Justice, "Pre-Action Protocol for Debt Claims", Civil Procedure Rules, https://www.justice.gov.uk/documents/debt-pap.pdf, no publication date shown on the document, read 16 September 2026: the scope in paragraph 1.1 used in step 1, the letter of claim contents in paragraph 3.1 and the dating and posting rules in 3.2 and 3.3 used in step 8, the thirty day rule in 3.4, the debt advice extension in 4.2, the instalment wording in 4.4 used in step 9, and the fourteen days notice in 8.2.
- Competition and Markets Authority, "Unfair contract terms guidance" (CMA37), https://www.gov.uk/government/publications/unfair-contract-terms-cma37, published 31 July 2015, last updated 22 July 2026, read 16 September 2026: footnote 257 to paragraph 6.63, recording a reported case in which 8 per cent above base charged to a consumer was held unfair, which is the whole of step 7.

# debtor-ladder

## You are given
One UK hospitality business. Every unpaid invoice as a file or a row, with its number, date, amount, VAT, the goods or service, the customer name, the terms written on it and the date and address it was sent to. The venue's own written payment terms exactly as a customer sees them, including any interest or late payment clause. The deposits already held against each booking. Every contact already made about each debt, with the date, the channel, who sent it, who it went to and what was said or promised. The Bank of England base rate as a figure with the date it was read, supplied by Claude. For every debt, the classification Claude has already made, which is exactly one of `business debtor`, `individual debtor` or `sole trader`. For every debt, the exit Claude has already chosen where one applies, which is exactly one of `ladder`, `disputed`, `payment plan` or `solicitor`. And the drafted wording for every rung, written by Claude in the owner's voice.

## Produce
Write into a `./debtor-ladder-output/` folder:

1. `debts.csv` with these columns in this order: `debt_ref`, `invoice_number`, `customer_name`, `classification`, `invoice_date`, `invoice_amount_gbp`, `vat_gbp`, `deposit_held_gbp`, `balance_due_gbp`, `terms_on_invoice_verbatim`, `late_from_date`, `source_of_late_date`, `days_late`, `exit`. `debt_ref` is D001 upward. `classification` and `exit` take only the values listed above. `source_of_late_date` is exactly one of `terms on invoice`, `signed contract`, `email agreement`, `statutory default 30 days`.
2. `invoice-checks.csv` with columns: `debt_ref`, `check`, `result`, `evidence`. `check` is exactly one of `sent to the person who authorises payment`, `purchase order number present where required`, `matches what was agreed`, `deposit already held is deducted`, `VAT shown correctly`, `no open dispute recorded`. `result` is `pass`, `fail` or `unknown`. One row per check per debt, so every debt has six rows.
3. `interest.csv` with columns: `debt_ref`, `eligible`, `base_rate_percent`, `base_rate_read_on`, `statutory_rate_percent`, `annual_interest_gbp`, `daily_interest_gbp`, `days_late`, `interest_to_date_gbp`, `fixed_sum_gbp`, `fixed_sum_band`, `own_terms_carry_a_rate`. `eligible` is `yes` only where `classification` is `business debtor` or `sole trader`. `fixed_sum_band` is exactly one of `up to £999.99`, `£1,000 to £9,999.99`, `£10,000 or more`. `daily_interest_gbp` is the annual figure divided by 365, shown to four decimal places.
4. `ladder.csv` with columns: `debt_ref`, `rung_no`, `send_on_date`, `channel`, `sender_name`, `recipient_name`, `recipient_role`, `purpose`, `wording_file`. `channel` is exactly one of `email`, `telephone`, `letter by post`. Rungs are numbered from 1 and dated forward from `late_from_date`.
5. `rungs/` - one Markdown file per rung, named `<debt_ref>-<rung_no>.md`, containing the wording exactly as Claude drafted it with nothing added, removed or reworded, and the send date and sender at the top.
6. `letter-of-claim-checklist.csv` with columns: `debt_ref`, `item`, `present`, `where_in_letter`. Written only for debts whose `classification` is `individual debtor` or `sole trader` and whose ladder reaches a letter of claim. `item` is exactly one of `amount of the debt`, `whether interest or other charges are continuing`, `oral agreement details`, `written agreement details`, `assignment details`, `explanation where instalments are being offered`, `how the debt can be paid`, `address for the Reply Form`, `up-to-date statement of account enclosed`, `Information Sheet enclosed`, `Reply Form enclosed`, `Financial Statement form enclosed`, `letter dated at the top of the first page`. `present` is `yes` or `no`.
7. `contact-log.csv` with columns: `debt_ref`, `date`, `channel`, `sender_name`, `recipient_name`, `summary_verbatim`, `promise_made`, `promise_date`, `promise_kept`. Appended to, never overwritten.
8. `gaps.md` - a numbered list of: any debt with no classification or no exit; any debt whose `late_from_date` has no source document; any debt with a failed or unknown invoice check; any consumer debt where an interest or fee figure appears anywhere; any business debt where `own_terms_carry_a_rate` is `yes` and statutory interest has been calculated anyway; any letter of claim checklist with a `no`; any rung with no wording file; and any promise in the contact log with no follow-up rung after its date.

## Rules
- Codex classifies against the supplied definitions, dates, calculates, checks and logs. It never drafts a rung, never rewords the owner's wording, never decides an exit and never decides whether a debt is disputed.
- Never write an interest figure, a fixed sum or any late payment charge into a row whose `classification` is `individual debtor`. Where one is supplied for such a debt, write zero, leave the supplied figure out of every total, and list it in `gaps.md`.
- Never calculate statutory interest without the base rate and the date it was read. An absent base rate leaves the row blank and becomes a `gaps.md` item.
- Never place a fixed sum in a band by rounding. The bands are read off `balance_due_gbp` exactly as supplied.
- Never advance a ladder past rung 1 for a debt whose `exit` is `disputed` or `solicitor`, and never generate a letter of claim for a debt whose `exit` is `payment plan`.
- Never shorten the thirty day period after a letter of claim, and never date a further rung inside it.
- Never send an email, a letter or a message, and never connect to a mail client, an accounting package or a payment platform.
- Deduct every deposit held before calculating `balance_due_gbp`, interest or a fixed sum band. Charging interest on money already in the venue's bank is the error that loses the argument.
- Use British English, GBP with the pound sign, and DD Month YYYY dates. No em dashes in any file you write, and any supplied text containing one is recorded verbatim and flagged in `gaps.md`.
- Every file ends with this line: this is a working document prepared for the owner to check against their own invoices and terms, and for the owner's solicitor to check before any letter of claim is sent. It is not legal advice and it is not a view on whether a debt is recoverable.

## Return
The absolute path of every file written, the row count of each CSV and the number of files in `rungs/`, the count of debts by classification and by exit, the total balance due and the total deposits deducted, the number of invoice checks that failed or came back unknown and which debts they belong to, the base rate used with the date it was read, the total statutory interest and the total fixed sums with the band breakdown, every consumer debt where a charge was supplied and removed, the letter of claim checklists carrying a `no` with the items missing, the earliest and latest send dates on the ladder, and the `gaps.md` item count.