We realise that one of the most important aspects of running any business or institution is being able to collect the money owing to it, and although it is far from the most glamorous area of law, we understand that to our clients, it is probably one of the most important.
The Creditor’s Perspective
The Debt Collection process begins when a Debtor fails to pay an account which is in arrears and the arrear account is handed over for collection. At this stage the Creditor’s main aim is to recover the outstanding amount without incurring unnecessary costs.
Many Creditors do not have the time or resources to recover the debt themselves and thus outsource their debt collection to professionals.
The steps that we take to recover the arrear amounts are as follows: –
- To collect as much information regarding the Debt and the Debtor
We request updated information on the Debtor, about the nature of the debt and all documents supporting the claim. It is important to have updated details of an individual that you loan money to or extend credit to. Where the Creditor has outdated details for example if the Debtor has moved or changed contact details then updated details would have to be obtained.
- Attempt to contact the Debtor and Collect the Debt
Using the information obtained, we contact the Debtor either via email or post and inform him of the debt. Once contact is made, a specific time frame is provided by which time, the account has to be settled or an offer of settlement has to be made. In most cases, settlement negotiations are entered into at this point.
At stage 2, one of three things would occur:
- A settlement agreement would be entered into;
- There would be no response to our letter of demand; or
- We find out that the debtor’s personal information is incorrect and the correspondence is returned, undelivered.
- Should we be unable to contact the Debtor, then other methods are explored in an attempt to locate him. These methods include further investigations or using the services of a tracing agent to locate the current whereabouts of the debtor.
- Further Legal Action
Should there be no response to our Letter of Demand, then instructions would be obtained on proceeding with legal action. At this stage Summons will be drafted, issued at court and sent to the Sheriff of the Court to serve on the Defendant. Should the Defendant defend the action, then the normal civil litigation course would follow. If the Defendant ignores the Summons, then default judgement can be obtained against him.
Costs
Although Creditors have the right to pursue a debt and can do so legally, they, however, need to be aware that although the legal fees are charged to the Debtor, it is initially borne by the Creditor and can significantly increase the amount that needs to be recouped from the Debtor. We advise client’s carefully in this regard and about the options available.
Time Frames
We cannot predict how long it would take to recover the debt. The debt could be settled upon the first contact, or it could be settled in many installments as per a settlement agreement. In certain matters there may be no prospect of recovering the debt from the Debtor. In these cases, we advise clients not to throw further good money after bad. Each case is judged on its own merits.
Debt Collection: The Debtor’s Perspective
No one likes to be contacted and advised that they are owing money, but as our economy is taking a downward spiral, it is now more common than ever that debt is on the increase.
Should you be contacted by an Attorney or Debt Collector:
- Respond as soon as possible
- Contact the Creditor’s representative and enquire further into the matter. Obtain as much information as you need and should it be necessary, then enquire if you could be allowed a few days to come up with a solution or an arrangement to settle the debt.
- Debtors have every right to seek legal advice or to contact their own attorney. Should you be unable to settle the matter on your own you can consult with an attorney. As a debtor, you may also refer the matter to a Debt Counsellor, alternate dispute resolution agent or ombudsman.
We are predominantly a Debt Collection firm and we pride ourselves of the fact that a great deal of enthusiasm and effort is put into every matter. We strive for service excellence and keeping our clients rights upheld
Should you need assistance either as a Debtor or Creditor contact us on the numbers below.
BY: LARISSA SINGH