When it comes to debt collection, although the procedure to be followed is pretty straight forward, it can be lengthy and challenging for the creditor, especially in the cases of creditors from foreign jurisdictions.
The primary aim in collecting debt, is to achieve this through a negotiation with the debtor. Aiming to resolve this though negotiation, implies that no further costs and time is lost – contrary to directly proceeding with debt collection through the court. During the negotiation process, the costs and hardship on the creditor himself are less – however negotiation does not guarantee results/success. If all alternative means are exhausted and out of court settlement cannot be achieved, then the creditor will proceed with a judicial collection of the debt.
The creditor may try and negotiate directly with the debtor – but often it is done through lawyers/legal advisors.
In trying to negotiate, the below procedure is usually followed:
The creditor will contact the lawyers – provide them with details about the transaction and debt owed
The lawyers will then contact the debtor(s) – making them aware of the situation
Negotiation process – aiming to avoid court intervention (to avoid lengthy procedures, added costs and hardship for the creditor)
Official notifications and demand letters are then sent to the debtor(s)
Further communication with the debtor(s) – (electronic / postal correspondence and telephone communication)
Plenty of cases are amicably resolved during the negotiation process. This, of course, depends on the circumstances of each case – primarily by the debt owed, the relationship between the creditor and debtor(s),as well as the willingness of both sides to compromise and resolve the matter.
If the negotiation procedure is unsuccessful or the debtor(s) neglect to pay, the lawyers and creditor will proceed with debt collection through the court.
Prior to filling for debt collection through the court lawyers should discuss and make their clients aware of their professional view of the case – informing them of all potential risks and factors associated, as well as the strengths and weakness of their case.
Upon that, filling to the court is initiated (including legal actions / bankruptcy petitions / dissolution or liquidation proceedings for legal persons as the case may be).
Once the judgment is issued, lawyers take action for the execution of the decision thereafter.
Debt Collection Process
1. Case review with lawyer
2. Out of court negotiations with debtor
3. Court proceedings
4. Upon issuance of a court judgment, enforcement of judgment
Our office assists clients in the debt collection and recovery procedure. We strive to provide our clients with as much accurate and valuable assistance both before and during the debt collection procedure and we always aim in informing the clients as to the merits of their case and potential benefit from the court procedure in case of non-settlement. If you are interested in obtaining advise or representation, or want to know more about our law firm, please contact us.