5 things you need to know about Debt Recovery
- Recovering debts can be time consuming and expensive. There are a few options when looking to collect a debt; including that you can try to do it yourself, use a debt collection agency or work with a lawyer.
- Trying to collect the debt yourself makes sense if it’s not a large debt. Using a professional to assist you costs money. If you are not collecting a large debt you may not want any money you collect to be used up in fees. If you’re collecting a small debt you should send a letter of demand, and then perhaps take action in the small claims court.
- Working with a debt collection agency can be a good option. The disadvantage of working with a debt collection agency is that they will take a percentage of any money collected, and if the matter goes to court, they will not be able to represent you. You’ll then need to hire a lawyer.
- Working with a lawyer to collect a debt is your third choice. A lawyer will advise you on your legal rights to be paid. For example, you may have rights under your sales terms and under Australian consumer law. A lawyer will draft a letter of demand which is structured in a way which will enable you to immediately take legal action if payment is not made. A lawyer will then be able to draft and file your statement of claim, starting the process of litigation.
- It’s important that you choose the debt collection option that is best suited to your particular circumstances. This will generally depend on the amount owed and your chances of successfully getting payment made.
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