By Keely Wunsch, Law Clerk at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group
You’re not alone if you have performed a service, provided a product/good, loaned money or entered an agreement and have not been paid what you are owed. Debt collection is a pervasive issue affecting individuals, businesses, and organisations. Handling debt collection alone can be arduous, time consuming and tricky. Instead, creditors would be well advised to consider engaging a specialist debt collection lawyer. This can ensure a streamlined process, technical expertise and commercial know-how, allowing creditors to avoid the stress and uncertainty associated with going it alone.
Why do you need a Debt Collection Lawyer? The following reasons are some of the answer:
- The Best way Forward
Selecting the most practical and efficient debt collection strategy is something with which a skilled debt collection solicitor can assist. In addition to discussing various communication options, such as whether to have the lawyer send a formal debt collection demand, an experienced debt collection lawyer can advise on whether it would be worthwhile to try contacting the debtor first, or possibly assist a creditor to issue a debt collection demand themselves.
- To help Negotiate a Settlement
An efficient debt collection plan can be negotiated on behalf of the creditor by a skilled debt collection lawyer. Debt collection that results in a mutual agreement between the parties may save significant expenses and uncertainties associated with debt collection actions and may also greatly enhance recovery prospects, even in the event that the payment plan is eventually defaulted upon.
- Prevention is Better than a Cure
It is also preferable to prevent debt collection than to treat it. In order to evaluate terms and conditions and set expectations early in customer connections, it might also be a good idea to hire a debt collection lawyer at the start of a business partnership as a preventative measure (such as reviewing terms and conditions, considering any payment policy, default terms etc.).
- The Power of a Lawyer
Similar to this, early involvement with a debt collection lawyer may help convince reluctant debtors that their creditor is serious about collecting debt. A Letter of Demand with a law firm’s letterhead is often enough to make debtors make the payment, particularly when the letter confirms that legal proceedings will be commenced and their credit score will be affected.
- Impartial approach
By engaging a debt collection lawyer, this can even lessen any hostility that may occur between the parties during the debt collection procedure. By engaging a lawyer it guarantees that a professional and unbiased approach will be taken to the matter, to make sure relations are maintained without any detriment to reputations.
6. Debt collector Agencies charge double the fees
When parties seek to pursue debt colletion, they will need to determine whether a debt collection lawyer or debt collection agency suits best. A debt collection agency, unlike a debt collection lawyer is not normally able to commence and enforce legal proceedings against parties when a debt is owing. Due to this, a debt collection agency will often need to engage a debt collection lawyer to assist, meaning parties will need to bear the cost of the debt collection agency and the debt collection lawyer. This can make debt collection unnecessarily expensive.
Matthews Folbigg Lawyers has a specialist team dedicated to Insolvency, Restructuring and Debt Recovery. If you would like more information or advice in relation to Insolvency, Restructuring or Debt Recovery practice and procedure, please contact Stephen Mullette or Jeffrey Brown on (02) 9806 7459 or (02) 9806 7446,or email stephenm@matthewsfolbigg.com.au or jeffreyb@matthewsfolbigg.com.au.
