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Debt Collection from a Contractor – How to Recover Your Money?
Whether you run a business or not, you may at some point face the challenge of debt collection. Unpaid invoices, payment delays, or a debtor avoiding contact can seriously disrupt cash flow—even for a company. What should you do when a contractor doesn’t pay? How can you effectively assert your rights? Here’s a guide that will help you understand the debt collection process and outline the steps you should take.
What is a Debt?
A debt is the right to demand that the debtor fulfill a specific obligation. Most often, payment for goods or services. A debt may also involve the repayment of a loan, payment for services rendered, or another type of financial obligation arising from an agreement between the parties. When your contractor is overdue on payments, you have the right to pursue the owed money. Although this process may seem complicated, it is essential for maintaining financial stability. That’s why it is so important to act in an organized and thoughtful manner.
What Are the First Steps in Debt Collection?
Reminder and Contact with the Debtor
The first step you should take is to contact the debtor. Payment delays are often due to oversight or temporary financial difficulties. It’s worth starting by sending a reminder about the overdue payment—this can be an email or SMS. It’s crucial that contact with the debtor is documented. If you use email, save all messages you send and any responses you receive. This could be important if the matter goes to court.
Payment Demand Notice
If the reminder doesn’t work, the next step is to send a formal payment demand notice. This document should include detailed information regarding the amount owed, the payment deadline, and possible legal consequences if the delay continues. A payment demand notice is an important step that shows the debtor you are serious about the matter. A well-prepared demand can take the form of a registered letter, giving it an official character. It’s advisable to specify a final payment deadline in the document.
Negotiations with the Debtor
It’s also worth considering negotiating with the debtor. Sometimes, the debtor may agree to pay the debt in installments or agree to other terms that are favorable to both parties. This approach is particularly beneficial if you want to maintain good business relations with a contractor who has fallen into financial difficulties for various reasons. Remember to formalize any agreements reached in a contract.
What to Do if the Debtor Avoids Payment?
If the debtor continues to avoid payment despite reminders and demands, it may be necessary to take more decisive action. As a law firm, we strive to get the most out of each case at the pre-litigation stage. Taking a case to court is our last resort. However, if there is no response to attempts to amicably resolve the disputed issues, or if the debtor fails to pay as agreed, the creditor should consider filing a lawsuit.
Going to Court
If none of the previous actions have worked, you can file a lawsuit in court. Legal proceedings in payment cases can take time, though they don’t always have to. Depending on the value of the claim and the evidence you have in the case, proceedings can be conducted in different “modes.” If you have a document showing the debtor’s acknowledgment of the debt, you can apply for a payment order in summary proceedings. If you do not file such an application, the case will be heard in a writ-of-payment mode. Most payment cases—if the evidence submitted with the lawsuit allows it—end with a payment order being issued without a hearing.
Enforcement by a Bailiff
After obtaining a final judgment—whether it’s a payment order or a court judgment—you can apply for the enforcement clause to be attached to the enforceable title. After serving the enforceable title, you can request a bailiff to initiate and carry out enforcement proceedings. The bailiff, depending on the content of your application, has the right to seize the debtor’s assets, including bank accounts, movable property, and even real estate, to satisfy the debt. The enforcement process by a bailiff is usually the final stage in debt collection, but its effectiveness often depends on whether the debtor has sufficient assets to satisfy the claims. The bailiff can also auction seized movable or immovable property, allowing for the funds needed to pay off the debt to be raised.
Is It Worth Using the Services of a Law Firm? Debt Collection in Szczecin.
Law firms specializing in debt collection can significantly speed up the entire process. Working with professionals ensures that all steps are taken in accordance with the law, and the debtor has no grounds for defense. A legal advisor can help draft a payment demand notice, prepare a lawsuit, and represent you in court. Additionally, the law firm can negotiate with the debtor, which often leads to a quicker and more favorable resolution of the case. It’s worth noting that in the lawsuit, you can claim the reimbursement of legal costs from the debtor if the court rules in your favor.
Summary – How to Effectively Assert Your Rights?
Debt collection in Szczecin can be divided into several stages. However, the key is to act quickly and decisively. The longer you wait, the harder it may be to recover your money, and the debt may become more difficult to collect. Every situation is different, so not every method will be effective in all cases. It’s always worth carefully analyzing the situation and choosing the strategy that best suits your needs.
If you still have doubts after reading this article, contact us. Our team of lawyers will help you outline a plan of action to recover your dues and provide support at every stage of the proceedings. We’ll discuss your situation and help you find the best solution.
Contact Us
If you need legal assistance, contact our law firm at +48 690 009 732
Write us an email: info@walawski.com
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We invite you to read our latest article, where we answer the most frequently asked questions in conversations with clients – “What is the difference between an advocate and legal counsel?”. “Can a legal counsel appear in court?”. You can find the link to the article here.
