Recovering Unpaid Business Debt

Often, the most difficult part of owning a business is collecting on the unpaid bills of former customers.  However, as collecting money that your business is owed is an essential part of running your business, you should educate yourself on the process of recovering unpaid business debt, as well as the variety of legal options available for debt collection purposes. such as debt collection settlement.

Self-Help Debt Collection Options

The most common place to start in recovering unpaid business debt is to contact the debtor directly about the unpaid bill.  If sending past-due invoices and contacting the debtor by telephone still does not produce payment, then the next step is to write a formal letter to the debtor demanding payment.  In your letter, you should be sure to reference the details of the transaction that led to the bill, including the date(s) that the product and/or services were requested, any contracts or payment agreements that were signed by the debtor, and the terms of payment.  You might also detail your attempts to contact the debtor by sending invoices, using the telephone, or sending e-mail messages.  Finally, be sure to include a certain date by which you expect payment, along with a description of the potential consequences and/or your intentions if payment is not received by that date.

Referring an Unpaid Debt to a Collection Agency

If your attempts to collect an unpaid debt for your business are not successful, you may want to contract with a debt collection agency for assistance in recouping your debt.  Typically, a debt collection agency will charge a contingency fee for its services.  This means that the collection agency will retain certain percentage (usually about 50%) of any amounts of money collected toward the debt.  If the collection agency is unable to collect on the debt, however, there may be no fee for its services.  A collection agency will make efforts to collect the debt on your behalf through phone calls, letters, and even litigate debt settlement lawsuit if you so choose.

Filing a Debt Collection Lawsuit

If you are unable to collect the debt by informal means, or via a collection agency, you can file a debt collection lawsuit in your local courts, either on your own, by hiring an attorney to represent you, or by contracting with a collection agency to have its attorney represent you.  Whether you should retain debt settlement attorneys depends on the nature of the debt, the amount of the debt owed, and the complexity of the court procedures and laws involved in your debt collection lawsuit. 

Retaining a Lawyer to Collect an Unpaid Debt

Particularly if you have a large unpaid debt to collect, and an uncooperative debtor, it may be to your advantage to hire a lawyer with an extensive practice in creditor-debtor law to provide assistance to you.  Debt collection can be time-consuming, complex, and frustrating, so it may be more cost-effective to hire an attorney to pursue the debt on your behalf.