Interested to get a view from white- and blue-collar professions. Are debt collectors worthwhile? Do many people insist on upfront payment for certain industries?
My experience is it wouldn't be worth going to Court for under $5K… and most of my debtors are a bit under that…
Best Way to Recover Debts in Business?
[Deactivated] on 11/04/2019 - 15:27
Comments
You should probably ask other business owners, rather than white and blue collar professionals.
I assume that you have knowingly allowed your debtors to get to that value of debt. I imagine that only some of those are not making any payments to you?
For your hard-core debtors, you can obviously take other actions such as COD, and you can engage a debt collector for a prescribed level of service (e.g. legal letters of demand) without going all in. Worse case you become one of those creditors with your hand out when the debtor is declared in receivership or whatever.
Is it business to business or customers?
Both.
Depends on amount. In my experience, <$2k, it has not been worthwhile.
People who won't honour small debts are the biggest deadbeats.
Agree it’s not worthwhile going to court for under $5k. I would consider using one of those debt collection services where they only charge if the debt is collected. One I know of charges ~25% for debts under $5k. Getting 75 cents in the dollar back is better than nothing.
Usually just the threat of having to go to debt collectors puts enough pressure on the debtors to pay.
My wife and I owned a large 500sm store in Perth. Our biggest debtors were people who wrote out cheques that were dishonoured, and I chased every one of them. I know the people don't write cheques anymore, but if I had another business I would still chase those that didn't pay me. Its hard enough in business, to survive, let alone getting ripped of by someone not paying their bills. I was taught years ago that your business is like a leaky boat, and the only one will fix the holes, is you.
Good luckIf the debtors are applicable to the corporation act, send a statutory demand. If not, qcat/vcat.
You need to get all your documentation etc correct up front before you can even take it to debt collector according to a friend who said the debt collector couldn't do anything as they didn't have everything in place. The debt collector helped them out with this.
You've come to the right forum. Bikies.