The Best Debt Recovery Solutions for Your Business

No business wants to go so far as commercial litigation Toronto just to collect a debt from a consumer. Such may be necessary as a last resort, but you can try one of these methods before you take into the courtroom.

Send Debt Letters

Letter sending is a tactic that many businesses use these days to try to get their customers to pay their debt. Your letter can be as forceful as allowable by the laws of debt recovery, or it can be or as mild as you want it to be. It can be personalized so that the debtor knows that you are not a cold and calculating third-party company. You can speak to the debtor like a human being and request that he or she resolve the situation of the owed money. Many debtors respond better to kindness and understanding than they do to harsh collections tactics. Some debtors sincerely do not have the monies, however. No tactic is going to make the money appear in that case.

Outsource Your Collections Team

One thing that you can do to improve the amount of debt that you recover from defaulted customers is that you can hire a third-party company or a corporate debt collection agency to do your collections work for you. Hiring such people can help you in more ways than one. First, it can save you some time. Secondly, the specialists may be able to get results for you because of their rigorous training.

Write Off the Debts

You can write off the bad debts and go through less trouble if they are small debts. You may want to make many efforts to collect large debts, but the small debts should perhaps be handled lightly. You can claim the bad debts on your business taxes as long as you can prove that you made reasonable attempts to collect the debt, and the person did indeed owe the debt. You will get a tax break on the unpaid funds.

Agree to a Settlement Amount

Another thing you can do before you call a commercial litigation lawyer is offer the debtor the settlement deal. This tactic works best for debtors that you think will never pay you back the full amount no matter what you do. If you can get the debtor to pay just part of the debt, you can at least have that money back in your business. You can have a collections specialist call the debtor, or you can send the person a letter. The debtor will contact you if the deal seems like something that he or she can do.

The previously mentioned tactics can help you to collect monies that people owe to your business. You will always have +120 Days as a tactic, but you can try the other methods first to avoid long processes.

Image Credit: BusinessLawyerNYC

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