5 things you
need to know
about
Debt Recovery
- Recovering debts can be time consuming and expensive. There are three common options for collecting an unpaid debt: do it yourself, use a debt collection agency or work with a lawyer.
- Trying to recover a debt yourself can be a good option if the debt is small. Using a professional to help recover debts costs money - and it may not make sense to spend the money you recover from the debt in fees.
- Using a debt collection agency can also be a helpful choice. In general, the agency will take a percentage of any money collected. Keep in mind that the agency may be unable to help you if the matter goes to court. In those situations, you’ll also want the assistance of a lawyer.
- Working with a lawyer to collect a debt is your third choice. A lawyer will first advise about your legal rights (including under the sales terms of your business or the Australian Consumer Law). A lawyer will then draft a letter of demand which is structured in a way to enable you to take immediate legal action if the debt is not paid. A lawyer will also be able to assist if you need to recover the debt through litigation. Using a lawyer to help recover a debt is a wise choice for larger debts and debts that could have a significant impact on your business.
- It’s important that you choose the debt collection option that is best suited to your circumstances. The right choice will generally depend on the amount of money you are owed and your chances of successfully recovering the debt.
