No doubts about it – running a business is hard, arduous work – and one of the hardest parts is trying to collect unpaid or delinquent debt from partners and clients and customers. Your time is valuable, and every hour you spend chasing down unpaid debt is an hour you’re not spending making money. So while collecting on debt seems like common sense, you should always calculate how much time you’ll spend doing it compared to how much money you’ll get in return. In other words – is your debt recoverable?
One of the very best things you can do to make sure your debt is recoverable is get the whole thing in writing. That will save a ton of headaches down the road, and make debt collection much easier.
With that said, there are two main things to consider when making the decision on whether or not to pursue debt collection: the status of the debt, and the status of the debtor. Keep reading to learn more!
There are 4 steps to determine the status of the debt owed to you and whether or not it’s recoverable.
- How much is owed? As we mentioned above, some debt is not worth your time. While it may bother you to let unpaid debt go unpaid – if the amount is small enough, your energies are better spent on realizing more profits.
- When was the debt due? The more recent, the better. If a debtor is only a few weeks behind, it’s likely they just missed a payment and need a little bit more time. However, if the debt was due months or years ago, it’s much more likely that the debtor does not intend to pay you at all.
- When was the last payment? How many payments in total? Again, time is a big factor – attempting to collect as soon as possible after a missed payment can make the difference in whether or not you recover any debt.
- Did the debtor agree, in writing, that they owe you the debt? If you have to send their debt off to collections or it becomes a legal matter, having their written agreement to pay you on hand can make or break the case.
So, the best case scenario for recoverability is a large, recently delinquent debt that has a good history of payment, a contract, and only recently became an issue. Whereas your buddy from high school that owes you $20 for concert tickets? Time to let that one go!
You can’t collect debt from someone you can’t find. If you don’t have some or all of the following information:
- Full Name
- Phone Number
- Home Address
- Email Address
Then recovering your debt will be much harder and more time consuming… if not impossible.
Is Your Debt Recoverable? Let’s Get To Work!
If you’ve gone through all these factors and have decided that it’s worth your time to pursue this debt, hiring a debt collection firm is the best chance you have at getting paid – and also the most economical as far as your time and money goes.
We’re here to help, and you can get in touch by filling out our online form. We look forward to working with you!
Gilliam & Mikula, PLLC, is centrally located in Richmond, Virginia, and serves clients throughout the Commonwealth of Virginia. Our attorneys have over forty years of combined experience in various practice areas, representing individuals and businesses. We are licensed to practice in all General District Courts and Circuit Courts of the Commonwealth of Virginia including, Central, Tidewater, and Northern
The attorneys at Gilliam & Mikula are here to smoothly guide you through the “legal maze” and ensure that you achieve the most favorable outcome.