Debt Collection and Economic Recovery

What does the global economic situation mean for debt collection and recovery?

In the past few years, the impact of the Global financial crisis has been immense on the economy in general and the amount of unpaid debt which is burdening businesses. However, in the last year or so, the deep catharsis and recession of the global financial crisis has abated and there has been the emergence of some ‘green shoots’ in the global economy. For instance, the global shipping index went up recently, as have some global commodity prices. There have been some encouraging employment figures, particularly from USA in recent months and Australia in particular has shown a remarkable resilience to the global downturn. If your business had accumulated long term outstanding debts from the global financial crisis from people who simply could no longer afford to pay their bills because of the impact of the global financial crisis, it is now possible that they can no longer rely on this as an excuse because the economic growth which underpins the usually solidity and robustness of the Australian Economy is returning and meaning that many of the debts which debtors would have been unable to pay start to become payable as incomes return to businesses and people become more capable of repaying debts.

This means that debt collection in a period of economic recovery is likely to be more successful. There are likely to be far less unrecoverable debts as the economy continues to recover. This means that new recovery action which is launched is likely to be more successful and recovery action that was instituted but left dormant or abandoned could now be enlivened to recover money that is owed to you because the economic recovery has begun to influence the capacity of businesses to repay debt and recapitalise in to a strong position of growth.