Boston Commercial Services Pty Ltd (ABN 87 114 658 070) CAPI Licence Number 409 456 759

You are here: Home / News / How to Manage a Debt Recovery Dispute

How to Manage a Debt Recovery Dispute

When improperly handled, overdue receivable debts can severely impact a business’s ability to stay afloat. Overdue accounts not only cost money to collect, but they mean that cashflow is not available to the business, meaning it itself is at risk of accruing debts that it cannot pay. This is especially so when overdue accounts become long term or ‘bad’ debts.

 

When debt ‘collection’ becomes debt ‘recovery’

Effective and consistent debt collection procedures can go a long way to preventing ‘old’ debt. However even businesses with the most efficient debt collection procedures, will end up having to deal with ‘old debts’ of 120 days or more.

Debts become increasingly difficult to collect once they are 90 days old and virtually impossible after 120 days. Therefore, it is usually at this point that recovery procedures are warranted, as normal collection procedures have been exhausted and are unlikely to achieve further results.

A business may resort to legal recovery options where a debtor disputes the debt, refuses to pay or fails to adhere to a negotiated payment plan.  

How to recover a debt  

While each debt dispute will be different and may require a customised strategy, there are some integral steps that can be applied to all  debt recovery proceedings.

 

Manage debt recovery dispute

 

Act quickly

The most important thing to remember when dealing with debt recoveries is to act quickly. Not only do strict statutory limitation periods apply, but as stated above the longer you leave it the weaker your prospects of recovering the debt become.

 

Make a formal demand

This is most effective when done by way of a letter to the debtor which:

  • demands immediate and full payment of the debt which is owed;
  • specifies a date and method by which payment should be made;
  • attaches a copy of the relevant account, invoice or balance sheet; and,  
  • foreshadows what legal actions will be taken if payment is not made by the specified deadline.

Such a letter achieves a dual purpose: (1) When issued on your lawyer’s letterhead it can jolt the debtor into taking steps to pay the debt; and (2) It can be shown to the court to support your claim for legal costs.

 

Institute legal proceedings

If payment is still not forthcoming or the debtor disputes the existence of the debt, a claim should be filed with an appropriate court. If the debtor fails to respond to the claim within the requisite time, default judgement may be available. Otherwise the litigation process may be followed through to judgement or settlement between the parties.   

 

Enforce the debt

Once you have obtained a judgement against the debtor, there are various means by which you can forcefully recover the debt. You may apply to the court for a variety of orders which can enable you to seize or obtain a charge over certain property of the debtor or garnish their wages. You also have the option of commencing proceedings to bankrupt (in the case of an individual) or wind up (in the case of a company) the debtor and register as a creditor in their insolvency.

 

Where can I get help with debt recovery?

Businesses often benefit from having a professional third party perform their debt collection and recovery, as debts can be collected quickly and efficiently without jeopardising client relationships.

Speak with an expert about how you can better manage your debt collection now.  Your business’s ability to expand and remain profitable may hinge on it.

Get In Touch

Get an obligation free assessment now


Get in touch with us

Talk to our experts in Debt Recovery, Legal Services and Finance Solutions

  • I have known the principal of the BOSTON Group (Derryn HARRISON) as well as key staff members (including Ben GOWER) for well over 2 decades and have been using their professional services for myself as well as for Powerhouse Logistics Pty. Ltd. on a regular basis, not only in Sydney but on a national basis.

    At all times BOSTON have been extremely pro-active, attentive, courteous and professional with all matters we threw at them. Their advice has always been extremely sound and commercial and I find them to be a "breath of fresh air" within the legal fraternity and have no hesitation whatsoever to highly recommend them.

    Peter Brueckner

    Powerhouse Logistics Pty Ltd (CEO)

  • Expect A Star has worked with The Boston Group for 10 years. In this time we have appreciated the ongoing support of Boston for all of our collection and legal requirements. Like most businesses cashflow is critical to ongoing success and growth, with Boston we have found a partner who are an extension of our business and play a key part in our cashflow management. The Boston Group bring a level of expertise to our business which is valuable and coupled with their excellent customer service we look forward to continuing to work with them for many years to come.

    Ryan Meldrum

    Former CEO

  • I have been using the services of The Boston Group and their legal entity for over 11 years. During this time I have found their service to be impeccable, delivered with the utmost professionalism and integrity. The vast majority of cases that I have placed with Boston were far from straightforward, requiring legal acumen and delicate handling. Having used all methods available without success to procure payment, I confidently placed these matters into their safe hands. In all instances a successful outcome was achieved.

    Mark Parish

    Credit Manager

  • SNP Security has had the pleasure of working with Boston Commercial Services for the past 11 years. Boston has played an integral part in the continuing success of SNP Security’s low DSO’s, 90 Day % Debt & of course Bad Debts Written Off.

    Amanda Griffiths

    National Administration Manager

Boston Commercial Services is well known debt collection agency in Sydney, Melbourne and Brisbane who has long experience in debt collection.