Steps in Debt Recovery

First, you have to understand your current situation. It depends on you and how much relevant information you provide your lawyer with. If you help your legal expert to understand your situation, he or she will be able to give proper advice on further steps to take.

Your lawyer then reviews the debtor in great detail. Your lawyer will focus on determining if there is a financial capability to pay back any debt. After this step, your lawyer will be able to determine whether the case should be brought to court.

A Letter of Demand is a document that aims to notify the debtor of potential legal action if he or she does not pay back the debt. After receiving a formal warning, a debtor can initiate the negotiation or opt to pay the debt back as a whole.

You or your lawyer can also submit to court. This way, you show that attempts were made to recover the debt before taking any further action.

After you or your lawyer submit the Letter of Demand, you need to wait for the debtor’s response. Typically, there is a time period within which the debtor must reply. The debtor will oftentimes respond, and depending on this response, you will know whether to negotiate or bring it before the court.

If the debtor is not ready to negotiate and the Letter of Demand proves to be unsuccessful, or if the parties cannot agree on payment terms, then the only option is to file a claim with the appropriate court. Depending on the route taken, the amount and type of claim will be determined.

When the court where you filed a claim decides in your favour, the debtor will have to pay back the debt. If he or she fails to do it, however, then your lawyer will advise you on the next steps to take to enforce the collection.