If you’re trying to collect on a commercial debt, you may wonder what happens if you’re unable to recover what is owed to you. How you’ll handle the situation largely depends on the facts involved. Read on for some suggestions on what you may want to consider doing.
Determine if the Debtor Went Out of Business
One of the first things you should do if you can’t collect a debt owed to you is determine if the debtor went out of business. This step is crucial because depending on how the commercial entity was structured, the owner(s) of the business may not be legally required to pay for the debts of the business and therefore, pursuing the debt may be a waste of your time and money but there are lawful ways around this.
Review Your Service Contracts for Personal Liability
Review the service contract you had the debtor sign. You want to see if there is a clause that guarantees that the person signing on behalf of the business will be personally responsible for the debt if the business is unable to pay.
Determine If Chasing the Debt Is Worth It
Review the account and decide if the balance is worth chasing. Sometimes it makes more sense to write off a debt than it does to spend time and resources to get it paid, especially if there’s no guarantee of payment. An experienced collections attorney can help you weigh the pros and cons.
Talk to a Commercial Debt Collections Lawyer about Your Potential Options
If you’ve decided that the debt is worth pursuing, make an appointment to talk with a commercial debt collections lawyer about your potential collections options. A lawyer could help you explore the possibility of a prejudgment writ of attachment, a lawsuit, a lien, or could even settle with the debtor on your behalf. A commercial debt collections attorney can also help you get paid if the debtor leaves the area to avoid paying you.
To learn more about how you can collect on commercial debt, contact collections attorney Ronald P. Slatse today.