When someone close to you owes you money, you are in for a rough patch. Debt collection is already difficult as it is, and the fact that a loved one owes you can make it even more so. If the debt goes unpaid for months beyond the due date what does a good creditor do? Collect it, of course. But, how?
Rainey Collins Lawyers share ideas on how to collect a bad debt, and make sure it gets paid. Here are some practical steps to protect yourself legally and help with your debt recovery.
Make Sure You Have a Written Agreement
As soon as someone brings up borrowing money from you, prepare a clear-cut and concrete form of agreement. A written agreement keeps things businesslike, just how they need to be. When incurring and collecting big debts, the situation tends to become personal.
Put the terms of the transaction on paper and lay out all the details. Have your debtor sign it. If they play the ‘friends & family discount’ card on you, take the document out and remind them that you mean business and you would actually like to be paid back.
Demand Payments in Writing
Stay businesslike when you ask for payment, and do it in writing. Send out a printed notice to your debtor and keep a copy for yourself. When writing your piece, start by reiterating the terms you mutually agree on. Then, state your demands clearly noted on paper so that there is little room for confusion. Never threaten the other party. Since this isn’t just moray wrong ,in delicate situations , they may use anything you do or say against you as a reason to not pay.
Every time you send out written notices to your debtor, you build a paper trail of your agreement. Likewise, every time you get a reply from them, you track their response or lack of it. If they answer via email or text messages, save copies of their replies. Also, do not forget the original document of your agreement.
If the debtor is amenable to talking things over and actually paying, things will be a lot simpler. But, the debt would not have lasted for months and years if they were. It may be time to get some legal help and bring the issue to court. Contact a lawyer who offers debt collection services, and let them manage the process from there. If your debtor can go personal with you, they cannot with a lawyer who is out to get them.
There are ways to collect a bad debt without resorting to threats and banging on the debtor’s door at midnight. By doing it in a civil and businesslike manner and hiring legal help, you stay on the side of the law and hopefully settle outastanding debts.