If individuals or organisations owe your business money, certain steps must be taken to get what is owed to you. While most individuals understand their responsibility to pay back what they owe, some do not. There will always a few who will not honour their debt, and it is for these people that debt recovery services may be needed.
Debt Collection Company vs. Debt Recovery Lawyer
For some businesses, a debt collection company is the preferred method of getting their money. However, you could also benefit from using a debt recovery lawyer who can provide a wider range of debt recovery services and options
If you have clients that are in arrears and are refusing to pay, then it may be time to engage a lawyer. Debt repayment and collection is a process of escalation. Your lawyer understands this and will act accordingly, instructing you to take things one step at a time.
Send a First Reminder
The first step is to send a courteous reminder. This can be done with a phone call or email. People in debt sometimes get so busy that they forget the terms of the arrangement. A calm, non-threatening and well-worded email or letter may be all that’s necessary to get them to pay.
Send a Formal Reminder
If the first reminder doesn’t work, then you may need to issue a more formal overdue payment reminder. If the situation persists, your lawyer can send a final notice. This should be accompanied by an explanation that stipulates precisely the consequences of not paying, and why the debtor should care about those consequences.
Continued non-payment may require your lawyer to undertake litigation. If the debtor is a company that’s unable to meet its financial obligations to any of its creditors, you may be one among many entitled to a share of the assets when divided up at the time of liquidation. If the debtor is a person, the court may order a mediation session. This can lead to the person being forced to agree to a repayment schedule that will be administered and enforced by the courts.
A debt collection lawyer can provide useful debt recovery services to get an outcome that’s favourable to you. However, you will need to do your part. It’s vital that you keep all documents related to the debtor’s account, including the original contract that proves there is a legally binding agreement between you. It’s also important to save and gather together all the correspondence you’ve exchanged with the debtor in question to demonstrate that you’ve made every reasonable and civil attempt to recover a debt.
You can’t run a business if people don’t pay what they owe you. It’s therefore important to enforce lending contracts, and hiring a lawyer with the knowledge, skill, ability, expertise and experience in such matters can help you do so without a lot of administrative hassle. Make sure you hire someone with deep insight into law who can offer you a range of debt recovery services.