If you need a debt recovery lawyer in Sydney, it’s crucial to find an experienced professional who has a successful track record in similar cases. Look for a lawyer who can provide clear communication and updates on your case, as well as a transparent fee structure.
As a business, you must have a solid debt recovery system to maintain cash flow. A debt recovery lawyer can help you to recover any outstanding money owed and assess your credit and terms and conditions to ensure they are appropriate.
Find out more about debt recovery, the process, how much it will cost and how debt recovery lawyers can help. Let’s take a closer look.
What Do Debt Recovery Lawyers Do?
As well as recovering outstanding debt, a debt recovery lawyer can also help improve many financial aspects of your business, including;
- Review your existing contracts and agreements to ensure they are appropriate for your company
- Ensure that your terms are clear to help avoid litigation
- Draft personal guarantees to protect your business interests
- Draft a legally sound letter of demand
- Provide legal advice regarding potential litigation and assess if it is commercially viable
- Assist when pursuing a matter through the local court
- Effectively manage and control your credit, including documentation review
- Enforce a debt or judgement in court
- In-house debt recovery training for staff
- Bankruptcy and insolvency advice
How Much Does It Cost?
A company or individual that owes you money is called a debtor. The first step in debt recovery is issuing a letter of demand to the other party. A debt collection agency or debt recovery lawyers can issue a well-drafted letter which details specific information about the debt, how it arose, and requests for payment within a certain period.
In many cases, well-drafted letters of demand from a lawyer can resolve a debt quickly and efficiently, with minimal costs.
In some cases, the matter will need to proceed to court, many law firms do not take commission, and most of the costs will be recovered from the other party.
Do You Have To Go To Court To Recover A Debt?
After you have issued a letter to your debtor demanding payment, if they have still refused to pay and you have exhausted all other options, you may be required to commence legal proceedings.
The local court small claims division will attempt to reach a satisfactory outcome in a pre-trial review. Like mediation, both parties will discuss the issue and try to reach a mutually agreeable solution. If this alternative does not produce a favourable outcome, the next step is a judgement made in a court ordering the debtor to pay.
If the claim is under $20,000, the local court’s small claims division can deal with the matter. You are not required to be present in court if you have legal representation and will only need to provide a written statement.
What Happens After Legal Proceedings Are Commenced?
Debt recovery lawyers can help enforce the judgement and ensure that the payment is made promptly. If no response is received within 28 days, enforcement options, such as seizing assets, property or bank accounts, may be necessary.
A bankruptcy notice may be filed and served on the debtor. They risk being declared bankrupt if they do not pay or make arrangements within 21 days.
How Can You Avoid Bad Debts?
It is crucial for business owners to maintain a positive cash flow to help ensure their profitability and to meet financial obligations. There are various ways that a company can help ensure they stay in the black;
Effective management of your debt ledger
It is common for a company to have customers who owe you money and need to pay an invoice. Maintaining an effective system to ensure you recover all outstanding debts is crucial for your bottom line and your reputation amongst other business partners. Understanding how much is outstanding and following up is crucial for the ongoing success of your business. If required, commence in-house training to ensure you recover outstanding monies efficiently.
Maintain good professional relationships
Customer relations play an essential part in all businesses. Establishing a loyal customer base of repeat clients can help maintain a steady incoming cash flow, which is critical to any successful business. Debt recovery can be an uncomfortable or stressful situation to manage personally, so outsourcing to an expert like debt recovery lawyers can help to resolve an issue and maintain good relations with your customers.
Hire a debt recovery lawyer to recover all outstanding debts
Hiring an experienced debt recovery lawyer makes good business sense. Not only do many lawyers have an exceptional track record for recovering outstanding debt, but they can also tailor a method that suits the needs of your business.
Having a law firm instead of debt collection services means they can commence litigation immediately if their letter of demand does not result in payment.
Be proactive, not reactive
In business, it is a good idea to use preventative measures to avoid bad debt before the problem arises.
One way this can be achieved is to have a debt recovery lawyer review your business contracts, trade agreements and conditions of trade. They can ensure that the terms and conditions are appropriate for your business and can be enforced easily, which can help you avoid costly litigation procedures.
A debt collection process can be stressful. Therefore engaging the services of debt recovery lawyers can help ensure you receive the outstanding monies you are owed. In many cases, a well-drafted letter of demand, with your law firm’s letterhead informing the other party that you will take further legal action if no payment is made, is sufficient to finalise the matter. Sydney debt recovery lawyers have streamlined practices and a proven approach for successful outcomes.
As well as assistance with your debt recovery process, your lawyers can assist with commercial litigation, insolvency and bankruptcy advice, credit and contract documentation review and various other financial matters to help streamline your debt collection processes.
The best way to avoid using a debt collection law firm or agencies is to take preventative measures to be one step ahead of bad debt before the problem arises.