Using A Lawyer for Your Bad Debt Collection Problems
When people you owe money for anything or a service that you have provided to them, they have an obligation to pay for it. Many sellers offer credit or easy payment terms in order to attract clients to build their turnover but they are still entitled to be paid. However, credit does come with costs, not just the lost interest from your having the money on your account but often the collection costs can be painful and expensive. Often the quickest way to get your money is to contact a lawyer to help with bad debt collection problems.
Debt collection protocols
Debt collection is a matter that is governed by a number of regulations and laws in each country, and it is incumbent on the debt collector or agency to adhere to these laws. The laws are generally there to act as protection for consumers while recognising their obligation to pay their bill. Debt collectors cannot use obscene or abusive language while dealing with the people who owe money. They have to ensure that they do not harass them with repeated calls, or make calls before 8 am and after 9 pm unless the person agrees to such calls. Calls, or visits to places of work are also not allowed nor are visits to the person’s home. The debt collector has to be correct in the figures being claimed, and threats to sue are frowned upon by the law. They cannot talk about this debt to other than the person who owes the money or his or her lawyer. Wages cannot be garnished, and if property is to be seized it does require a legal sanction. At no stage must a debt collector claim to be other than what he is. Some debt collection agencies try to intimidate people by claiming to be representing a credit bureau, or a law enforcement official.
How to collect debt
Most large companies have separate departments or personnel, or sometimes it is the duty of the sales staff, to constantly follow up with customers in order to ensure that they make payments. If you are a solo operator, then you may be wondering how to collect debt since you have the unpleasant task of following up with your clients. It is not something many people enjoy as they feel it will sour their relationship with their client. As a result they outsource the recovery process to collection agents, who work for a percentage of the owed amount.
Some companies also sell their invoices to a type of finance company which offers an invoice discounting service. This is a version of factoring which many people have heard of. This means the service provider is paid by the finance company for a discount of the total invoice value, getting immediate cash-flow and the finance service will collect from the buyer.
North Shore lawyers for bad debt collection
Even though you may have given extended credit and made numerous requests to a company to pay their bills, you still do not receive your cash. For example, if you contact a lawyer in your area, they can work on your behalf to recover the debt. You may think that the last thing you want to d from there is to spend more money on the situation but often just a small outlay can make all the difference.
The first thing a debt recovery lawyer can do is to write to your debtor requesting immediate settlement. It is surprising how quickly companies respond to a letter from a law firm. Businesses do not want the costs not hassle of having to get embroiled in legal action. For a start, if they refer the claim to their own lawyer, that will incur costs for them from the start. Further, their lawyer will probably advise them to settle as the company has consumed the product or service that was provided. All of this is obvious to the company so why would they create further costs for themselves? So ask your own law firm to send a letter to the company that owes you money and see if that produces the outcome you are looking for.
Further steps in collecting your bad debts
If your debtor does not settle your account within the time stipulated by your lawyer’s letter, then you will need to consider further legal action. Here again your solicitor will advise you of the best course of action.
The debtor may come back with a payment plan proposal. You can discuss this with your legal advisor and possibly your accountant to see if it is a reasonable proposal. Remember, you are in business to make money and not to provide a cheap banking service to customers. So the payment plan must be a sensible option for you and your business.