Getting into debt is one of those things that people may not talk about – but it is more common than you may initially think.
What is debt recovery?
Debt recovery – a process similar to debt collection but with some small differences – is the process of a creditor reclaiming the money that they have lent to you.
A creditor might be a credit card lender, a bank arranged overdraft or store credit, amongst other examples. It can also be common for utility companies, such as water and electric, who have not received payment for bills which are outstanding.
Creditors can contact clients directly to start the process of recovering the money owed, or they can hire a specialist debt recovery agency to handle this process for them. Contact is initially made either by telephone or letter, or both.
If you need advice on any aspect of debt or the legal aspects which surround debt – whether as a borrower or a lender – it is wise to get in touch with a specialist London law firm such as www.forsters.co.uk, who can offer personalised legal support in this sort of situation.
What does debt recovery involve?
Ideally, debt recovery agencies will hear back from the person who has a debt with them, to open dialogue about making a repayment plan. It is not always essential to clear the whole debt immediately, but to begin with small repayments.
For business owners
If you are a business owner, it can be frustrating when people have not returned the money they owe. It is generally advisable to invoice as normal, chase up as appropriate and then to cease doing any work or services for the client until pay or communication has been received. It is also considered best practice to send a letter advising that you will be pursuing legal action, according to the Federation of Small Businesses.
For both parties, open communication is usually the key to resolving debt without too much of a lengthy or onerous recovery process.