Debt Collection Process Before Contacting A Debt Collection Attorney

Before contacting a debt collection attorney, ensure that your business follows a regulated schedule with regards to dealing with customers and expecting payments for good or services rendered.

If you are running a small to medium sized business, make sure you adhere to the following steps when it comes to collecting monies due, BEFORE contacting a debt collection attorney.

Make sure that the debtor is immediately aware of of the time frame in which you expect payment. Make sure that invoices clearly state “payment upon receipt of invoice” or something to the same effect, as well as the expected period before remittal.

  • Set up a billing schedule with which to issue bills.
  • Ensure that you have personal details of those within the business who are responsible for payments. Keep their information in a ledger, where you can log both their names and work-numbers.
  • If a debtor has not made the expected payment within the time allocated, then this is the moment to take proactive action. Call the debtor in a civil way, with a tone that imbues the sense that you want to continue having a good business relationship, and tell them that they have not paid within the period. Then ask them when you can expect payment.
  • If you still do not receive payment within the allocated number of days, call the debtor again. If the debtor is having financial problems try to arrange a payment agreement. Again, this must be done in a civil way, and all records of phone-calls and email communication must be kept.

After at least two failed attempts at receiving payment, and within a time frame explicitly detailed to the debtor, you may notify the debtor that you will discontinue service. This is also a perfect time for negotiating a final settlement.

If this last attempt does not work, and with records of all communication with the debtor, the creditor may approach a debt collection attorney.

2019-01-23T10:29:50+00:00January 23rd, 2019|Commercial Law, Debt Collection|0 Comments