As a creditor trying to collect on a debt, it might seem that the deck is stacked against you. However, you still retain many legal advantages when seeking money from debtors for goods and services provided.
You stand the best chance of success by leveraging your legal rights while avoiding illegal actions.
What you can do
Information from Upsolve reports that powers in a lender’s arsenal begin with such actions as charging late fees for delinquent payments and reporting late payments to a credit bureau. Your company also has the right to contact the customer through emails, text messages, letters and phone calls.
Because the debtor breached a legal contract, you have the legal right to collect on the unpaid balance for goods or services. If payment does not arrive, you have the right to sue through the court system. This might lead to a payment, but if it does not your company can with a court order garnish the debtor’s paycheck until the debt is satisfied. In some cases, a bank levy can take money directly from a person’s account to pay the debt.
Your company can also discharge the debt through the services of a collection agency. This will result in only partial payment but allows your business to move on from the situation.
What you cannot do
Engaging in unacceptable or illegal actions can damage your chances of collecting on a legitimate debt. Therefore, you should refrain from the following practices:
- Deceitful actions
- Threatening phone calls
- Harassment techniques
- Contact with third parties
Your company has the right to collect unpaid debts. Often this requires taking appropriate legal steps.