How to recover a bad debt – 7 Tips to act!Last modified: November 28, 2023
How to Recover a Bad Debt
If somebody owes you money, you’re going to want to know how to recover a bad debt. Chasing somebody that owes you money is one of life’s most frustrating chores.
If you are owed money personally or to your business, there are things you can do. This article will look at the skills and actions you will need to recover a debt.
Not being paid what you are owed is a problem
If somebody has failed to pay you what and when they say, this can be a problem. Especially if its money you badly need.
For Businesses, a payment that is a few days late may not seem like a big issue. But failing to stick to payment deadlines being met is never a good long term.
When somebody owes you money it can restrict you financially. The late or non-payment may trigger a series of ‘non-payment‘ scenarios.
It could be that you owe money also and are waiting for the payment to you before you can make payment to others.
Why do some people not pay what they owe?
People may not pay you on time for a number of reasons. Recognising the reason why payment to you has not been made may assist you in your efforts.
Understanding and addressing the problem can lead to a more expedient resolution.
If a company owes you money, it can be a little more difficult to get some leverage. There are actions you can take though to speed up the process of getting paid.
We have put together some tips on how to get a company that owes you money, to pay up.
A major reason why somebody may not pay you what they owe could be down to financial problems.
f they are struggling financially, you may be one of many debts that they are facing. However, if you have been promised payment, this won’t be any consolation.
Knowledge of the situation though can help you plan your next move.
A lack of communication can also be a factor in you not getting paid what was promised. Sometimes confusion over payment dates can lead to the absence of payment.
There is also the minority who will simply not want to pay. Unfortunately, some people in this world have a degree of entitlement and expect a free ride in life.
There is an old Yorkshire saying: “You either put coal on the fire or you take it off” – it is safe to say that everybody knows somebody like this.
Basic steps to recovering a debt
There are a few basic steps you can take yourself. There is no 100% cast-iron way on how to recover a bad debt but these few actions can help.
Send the debtor a letter
A fairly obvious act that can be done in minutes. A written letter send hard copy can produce results especially as it shows your patience is running out.
You may wish to use a firmer tone to express your intent to seek out payment. Encourage them to contact you as soon as possible to remedy the problem.
The message on how to recover a bad debt owed to you is loud and clear. If a letter does not resolve the issue then it is maybe time to get Expert advice.
Speak to Debt Collection Experts
A Professional Debt Collection service is often the first port of call for people seeking to recover a bad debt. All reasonable attempts have failed at recovering your debt so a solution should be sought. Speaking to Debt Collection Experts will help you clarify that your debt is collectable.
They should also be to offer a solution that is cost-effective in terms of the time it will save you. It is also much cheaper than using expensive lawyers.
Issue your own Court Claim
This can be often for more straightforward debts. Many avoid this route though as Court Fees are very expensive since the latest price rise.
There is also the Civil Procedure rules to consider and pre-action protocols. You will also need to draft legal papers for submission to the court.
Also, be aware that the debtor may dispute the debt and that will mean further court costs for you in the interim. If a judgment is awarded in your favour, you may also then need to contact a Debt Collection Agency if you need help to collect an unpaid CCJ.
There are also quite a few methods of CCJ debt collection to consider and which is most appropriate for your case.
How long does it take to recover a bad debt?
Recovering debts can be simple of difficult exercise. There is no set time period for such as every unpaid debt has a different scenario attached to it.
Frontline Collections can collect debts in a matter of days or months. Clearly, our objective is to collect as much as we can as quickly as possible. Sometimes this can be via repayment plans which are the only realistic option in a lot of cases.
Debts that are subject to legal action usually take much longer as they have to proceed through due process.
How can I prevent bad debt from occurring?
If only life was that easy right? But in all seriousness, you can take some basic steps to prevent you or your Business accruing bad debtors. Here are three ‘common sense’ considerations
Do some research
Know who you are dealing with. An example of this is; If you are a Landlord prospecting new tenants, you really should be running tenant checks on them. There are many ways you can try to find out information with the consent of your customers.
Agree the best terms for you
The payment terms on which you are set to be repaid should be clear and concise. Ensure there is no ambiguity or these can cause problems.
Keep communication channels open
Keeping your debtor at close quarters and regular communication with them will reduce the risk of non-payment.
Leading Expert Debt Collection Solution
If you or your Business have been reading about how to recover a debt, it is likely you are owed money. Contact our friendly Team of Debt Collection Experts today for immediate advice and assistance with your problem.