Debt Collection – How to collect a debt

In this article, I propose to explain how best to collect a debt.  You can find our debt collection services information here.

1. Firstly, make sure it is properly due. Sounds simple but some people will wait until they receive an invoice before writing a cheque.  Make sure the invoice is sent out and to the correct address.  In addition:-

 

• If there is a contract, check that you have complied with its terms in full and completed each element of work and invoiced the correct entity as per the contract

 

• If you have issued an invoice, make sure it was sent to a current

 

• If issues or concerns have been raised at any stage, make contact and try to sort out the issues on terms that are fair to both parties.

 

2. Speak to the person who owes the debt. Communicate by telephone or in person.  Don’t avoid confrontation as it is only putting off reaching a resolution.  If it’s become a problem, then avoid hiding behind emails, letter or voicemails.  Get in direct contact.

 

• Debts rarely go unpaid unless there’s a problem. The problem is either financial or with the service or product supplied.  Find out what the problem is.  Does the customer have a problem with your work or service?  If so, can it be resolved.  Is the customer encountering financial problems?  If so, will you accept payment by instalments or return of the goods?

 

• Communication is key when it comes to collecting a debt. Find out what has gone wrong and see if it can be fixed.  Work with the customer – it’s the best way to get paid.

 

3. Meet the customer. Knock on their door if they won’t answer the phone.  It is much harder to ignore someone who is outside your house or office.  Coming to see them has the added bonus that their spouse or co-worker will probably find out about the unpaid debt and this might mean it gets addressed.

 

4. If it is a case of “cannot pay” as opposed to “will not pay”, consider whether there is any purpose in pursuing them through the Courts at this time.

 

• Arrange to review the customer’s situation with them in a month or two.

 

• Consider whether the goods can be returned to reduce your loss.

 

5. When it comes to debt collection, prevention is better than cure. Review your credit terms and credit checks.  Make sure you get paid for work as you go along so that non-payment will not damage your business.  Make sure your contract allows you to “down tools” if payments are not maintained.

 

6. If it is a case of “will not pay”, and you have exhausted all avenues to resolve any issues, then it may be necessary to seek advice from a solicitor.

 

Hogan Dowling McNamara Solicitors are conveniently located at Castletroy House, Dublin Road, Limerick with plenty of off street parking.  Contact us by phone at 061 501100, email Thomas Dowling at [email protected] or get a call back by completing our contact form so we can provide you with further information or advice.