What is commercial debt recovery and who usually does it?
If you own or manage a company and are owed money by other businesses, you may have heard the term commercial debt recovery but may not be sure what it is.
What is commercial debt recovery and who usually does it? -- This is the term used when a company that is owed money by a second company makes an effort to recoup the money owed to them.
This can be done by the company themselves, or by a professional service they contract with to do the work.
In most cases, hiring a professional service gets better results. Unless the company has an in-house department with trained employees whose job it is to do it.
How does commercial debt recovery start? -- This will usually start with one or two letters sent to the management of the company owing money. The letters will ask for payment, and will often even give ways payment can be made over a prolonged period of time.
The letters will then ask for payment of the debt by a certain date.
If the debt is not paid by the date stated, a second form of contact will be initiated. This may be another letter or it may be a series of phone calls. Every contact after the initial one, however, will usually include the threat of legal action.
Legal action carried out -- The final step of Commercial Debt Recovery is when legal action is carried out.
This will usually be in the form of a lawsuit against the company and will demand the money owed plus interest and court costs.
Some companies will pay at this stage, as they know they do not want to incur extra costs. Especially in a court case they are highly unlikely to win.