Debt recovery is the process of recovering an amount of money which is owned by other people, entity and person who is legally obliged to pay to any other person. The payment will be in the return for any kind of service or good. There are a number of methods by which someone can recover money owed to them.
Steps For Debt Recovery
We have listed the steps below for debt recovery:
Step 1: Letter of demand for debt recovery
The first step is usually a Letter of demand. In this letter, your solicitor will demand payment of the debt to you within a certain frame, usually seven (7) days from the date of the letter. In the case of sending a letter of demand you need to be very careful about your words, you need to avoid any type of threats, harassment or intimation. If the debtor fails or refuses to pay the debt then you can go pursue the payment through court. There will be costs associated with making a claim through the court system however you may be able to ask the court for an order that the debtor pays you for some of your costs if your claim is successful.
Step 2: Mediation for debt recovery
Mediation is another option for debt recovery, whether you are an individual or a business. This is where you and the debtor meet with an independent third party to resolve any dispute about the debt and come to an arrangement. This process is generally encouraged by the courts as it means you avoid the time and expense of going to litigation and means that the parties have control of the process. If one of the parties fails to comply with any mediation agreement, then the matter can go to court.
If the debtor is not disputing the payment but is simply experiencing financial distress, your solicitor can help you to discuss a reasonable payment arrangement so at least you can get your money back over time. If the debtor is not prepared to enter into a payment arrangement, then the matter can go to court. If the court make a judgment order against the debtor, you can apply for the debt to be enforced in several ways such as a court instalment plan, a sheriff’s warrant, and so forth. In extreme cases, a debtor can also be forced into bankruptcy or liquidation.