Recovering Monies Owed
It is often said that cash flow is the ‘life blood’ of a business. In any business, cash flow can be severely affected by incurring bad debts. If somebody owes you money there is something that you can do about it.
Generally, pursuing a party for moneys owed requires embarking on the debt recovery process. Common debt recovery areas include:
- Moneys due by way of loan (personal, consumer or commercial);
- Moneys due from account customers;
- Moneys due for provision of goods or services;
- Moneys due under contracts or agreements;
- Moneys due for other reasons, eg. property damage, compensation, etc.
When pursuing a party for moneys owed, there are a number of options that are generally available, including the issuing of a letter of demand, the issuing of court proceedings, credit reporting, bankruptcy and/or the enforcement of security held.
There are however advantages and disadvantages to each option. There are a variety of other circumstances that may also influence which option is adopted including your relationship with the debtor, the debtor’s means of meeting the debt, the cost involved with the recovery versus the amount claimed, and the ability to locate the debtor and the cost of enforcement of any security.
When it comes to debt management it is recommended that a proactive approach be adopted rather than a reactive approach. Rather than consistently spending time and money chasing debtors it is suggested that measures be implemented that:
- Minimise the incurrence of bad debts; and
- Strengthen your legal position when dealing with debtors.
To a large extent these issues can be addressed by introducing contractual terms of trade.
How We Can Help
We can help you by:
- Advising you of your legal position, rights and obligations;
- Taking a hands on approach in managing your dispute or proceedings;
- Providing expert advice and knowledge in handling your matter;
- Explaining the litigation process and possible outcomes;
- Reviewing key considerations and risks involved in pursuing a debtor;
- If appropriate, assisting in resolving the matter by providing practical options and solutions;
- Drafting terms of trade for your business.
For further information please contact: