It is important for business owners to be consistent when chasing debtors to recover debts in a timely manner. By doing so, they will be able to maintain stable customer relationships while continuing to grow their business wealth.
Business owners should consider alternative ways of collecting debt before considering legal action. Taking legal action can be very expensive and timely, and should only be viewed as a last resort.
When an individual owes a business money, there are various avenues the owner can explore to rectify this, including using a debt collector, engaging in mediation or taking steps to collect an outstanding debt in the event of a debtor bankruptcy.
Employing the services of a debt collector to contact a debtor about an outstanding payment can end payment delays. This is mainly because debtors often wish to avoid having their credit rating downgraded. Debt collectors must follow a code of conduct that provides a complaint resolution system and ensures debtors do not feel unfairly harassed by the debt collector.
Business owners should consider using mediation as an alternative to having a magistrate settle minor debt claims. Mediation can save time and settle the matter in a way that suits both the owner and the debtor. However, if a solution is not reached, then the magistrate must make the final decision.
When a debtor who owes a business money is declared bankrupt, they are usually freed from the debts they cannot pay. As a creditor, business owners can make a claim called a ‘provable debt’ which entitles them to share in the distribution of debtor funds and vote at meetings related to the bankruptcy.