Customers who fail to make payments on debt they owe can hurt any business’s bottom line, causing some organizations to fail.
However, if owners take a practical and legal approach to collecting the monies they’re owed, they can keep their businesses up and running.
There are options available
These are a few remedies that may be helpful:
- Secured transactions: Also known as a loan or credit transaction, this method allows the lender to acquire specified collateral if the debtor defaults on their payments. But to do so, creditors must often obtain secured status by filling out certain documents.
- Replevin: Similar to a garnishment, a replevin allows the creditor to have their property returned if the debtor did not make payments on it. For example, someone who leases a car may be able to get the vehicle back if a debtor fails to make lease payments and are notified well in advance. However, notice requirements can be waived under certain circumstances.
- Involuntary bankruptcy proceedings: If owners’ tactics aren’t working, they can sometimes initiate involuntary bankruptcy proceedings. If a court accepts their petition, the debtor may have to sell their assets to pay back what they owe or formulate a debt payment plan that works for their financial situation.
Businesses need payments to survive
For owners to run their business successfully, it’s often necessary that customers pay their bills. If they don’t, owners may want to speak to an experienced and diligent collections attorney. They can help clients navigate through the complicated process of getting the money they’re owed.