Bad debts / debt collectors

[DebtCollector]

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Whoa !!! Matthew your making some fairly broad assertions about debt collectors. I’d love to hear your experience with debt collectors and the unethical and illegal actions they have taken to recover funds?

As for small claims court being the most effective means of debt recovery. I have to disagree. Just because you have spent your $70.00 and wasted a day at a tribunal to get a judgement against the debtor doesn’t mean your any closer to getting your money without spending a whole lot more on enforcing that judgement.

[chexton]

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I’d also love to hear these stories. We’re actively working to help small and medium businesses streamline their accounts receivable procedures and as a part of this are working with debt collection agencies and other professionals to give SMBs access to quality, legal, ethical debt follow up.

It’s an extremely interesting area and there are certainly right and wrong ways of doing collection. We’re doing it the right way and I’d be happy to chat with anyone about their experiences!

[Kennethti]

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DebtCollector, post: 107207 wrote:

Whoa !!! Matthew your making some fairly broad assertions about debt collectors. I’d love to hear your experience with debt collectors and the unethical and illegal actions they have taken to recover funds?

As for small claims court being the most effective means of debt recovery. I have to disagree. Just because you have spent your $70.00 and wasted a day at a tribunal to get a judgement against the debtor doesn’t mean your any closer to getting your money without spending a whole lot more on enforcing that judgement.

I would have to generally agree with DebtCollector, but only in certain situations.

Generally I would agree that bad debts should be followed up and if you have a number of bad debts, the first thing you should do is review your billing practices. Do others in your field encounter the same issues? If not, then something is going wrong.

Debt Collectors provide a valuable service however they are not effective in a few scenarios. An example would be where you know the other party has no money or no capacity to pay. Another example is where you know the matter is likely to proceed to a dispute in court. A debt collector usually doesn’t get involved in court action but they can refer you on to a lawyer to handle the matter in court.

Once a matter heads to court however you should reassess your situation. The court process can be complex and lawyers can be expensive. If your case is not to clear cut and a dispute is being raised in relation to the work that you have done, you may end up spending more time and money than what you can recover.

It’s not easy – you should always seek professional advice, even if it’s advice on whether you should be proceeding with the recovery of an outstanding debt.

[Southerngirl]

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beancounter, post: 106926 wrote:

Then we get a text message telling us to stop harrasing them and that
“Under Law only 2 contacts per week allowed”

Can anyone advise any reference to that?

Does the two contacts mean unanswered emails and text messages?

We no longer get ourselves in this position as we ask for a deposit before doing work for new clients – and we’ve had no objections so far

Hi
I thought it was 3 actual contacts per week (google debt collection).
Unanswered contact doesn’t count.
I’ve got one at the moment that is particularly sticky. I’ve been phoning them on the hour every hour and leaving a message.
Just sent them a registered letter saying I was passing on to collection agency if not paid by end of next week. It is a small amount but it is still 2x months phone bill and I’d rather it in my account than theirs (and they are receiving the benefit out of the goods they have)…
Good Luck

PS – I’ve been surprised by how many people are happy to pay a deposit up front.

[beancounter]

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We’ve found a company that may have the solution

http://www.somervillelegal.com.au/page16889/Business-Debt-Collecting.aspx

$38.50 for a letter of demand

We’ll see how that goes

[DebtCollector]

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Why would you pay $38.50 for a templated Letter of Demand from a law firm?

A letter of demand is the last thing you send after every other avenue of collection has been exhausted, because your only option after that is going to court/tribunal.

If you don’t intend on going down that path, don’t waste your time and money.

[Typeshed]

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Adam Randall, post: 524 wrote:

I have always written my bad debts off and not done any more work for the client.

The biggest I have had is $2500, last month we had one that was $1000, and a couple of others around $300 or so.

I get eaten up inside when chasing debt so find its healthier to let it go for small amounts.

Still if someone else can do the chasing and I even get a small amount of whats owed back then its worthwhile looking into.

It all seemed too complicated when I looked into it.

I tend to agree with you there – I had a bad debt of about $500 and when I said I would be handing it over to a collection agency I was told “if you do that, I will do $500 damage to your business”. In a small town, this could have been bad-mouthing me or as I owned a shop at the time, a spot of vandalism. I didn’t take it to the collection agency but I did report the threat to the police to make sure there was a record of it.

The whole experience lasted two weeks and in hindsight, I would have paid a lot more to have my stress levels reset.

[Author]

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