Debt recovery

What is debt recovery?

Debt recovery is the process by which a person can get money back from another person or company which is rightfully theirs. It is often assumed that debt recovery is a very simple process however in reality it is quite complicated because very different motivations of people who owe other people money.

What are the different motivations of not paying?

The first type of motivation is very simple. Often people are very forgetful and do not pay their debts because they have poor administration of their business or their personal affairs and simply make a mistake or forget to pay. Paradoxically these are the easiest types of people to deal with. They will often be embarrassed by the fact that they have not paid and they will pay immediately upon being prompted with either a payment reminder notice or a letter of demand.

The second type of person who is adept is someone who has a genuine dispute over the amount owing because they believe they were not actually provided with a good or service which the debt relates to. These types of debtors are much more difficult to deal with because they believe morally that you as a creditor not entitled to recover the debt and this can be a big problem in the debt recovery process because their recovery can take much longer and involve much more legal cost as well as administrative cost.

The third type of person is the most difficult of all. They actually recalcitrant in their debt repayment and act in a deliberate and systematic way to not pay their debts they do this because they think they can obtain some sort of commercial advantage from not paying their debts and simply make your business policy to not pay their debts until they absolutely forced to. In the case of someone like this it is best to actually avoid doing business with them in the first place because you will be forced to go through with the full force of all legal recovery proceedings if you want to get your money back you will have to sue them get a judgement, enforce judgement seek either garnishee or repossession proceedings. And possibly even bankruptcy proceedings if they have become insolvent. These types of people often have nothing left by the time that before the recovery process has been used against them which means that the entire debt recovery process is fruitless.

What is the first step in debt recovery?

In any debt recovery preceding the first step is to call the person and ascertain why they are not paying. If after a series of phone calls you simply establish that they have no desire to pay or if you cannot contact the person then you will need to issue a written statement to them which is usually either payment reminder notice or a letter of demand. We have both of these types of written notices available for purchase in template form on this site.

Debt Collection Letter Resources