Why you should try and avoid court for unpaid debts
The vast majority of small businesses are owed money. Some are owed much more than others but it’s a common problem that many suffer with. It’s tempting to jump straight into court action but it doesn’t always have to come to that.
Why avoid court?
Cost – When you decide to take a matter to court you can never be sure of exactly what it’s going to cost. There are solicitors and court fees that can come to thousands. There are other costs that can make chasing your bad debt a huge pain.
Time – As well as cost, there can also be a considerable time burden with court cases. This will take you away from your business where you could be doing something much more productive. If there are any appeals then this could take even longer.
How to collect payment
Communication – When you make any type of agreement, you want to take as much contact information as possible. This includes address, e-mail, and phone numbers. Once you’ve exhausted these communication methods, it’s time to increase the pressure.
Interest – Once you have given them adequate time to pay the debt, you can add late fees and interest onto the debt. This will often give the debtor the motivation that they need to pay up.
Legal threats – It’s important to know your options and let the debtor know that any further delay of payment will mean that debt collectors and/or court action is taken. This threat needs to be genuine and one you’ll follow through with.
The most effective method
The most reliable and effective method for recovering your debts is to call debt recovery services who will be able to reclaim the money that you are owed. This can be as effective as court action but without the negatives that come with it.
The cost of using a collection agency is usually vastly inferior to going through the courts. Also, as you are using another company’s services, you won’t have to spend your own time chasing the debt. This will allow you to focus on your business.
Taking legal action
No matter how hard you try, sometimes taking legal action is the only option left for you. Thankfully debt collection companies can help serve and carry out court orders. If you have any debtor issues, contact us today to see how we can help you.