How Litigation Services Help Creditors Recover Debt Owed
In essence, debt is when one person or entity owes another person or entity money, according to an agreement in which services or goods are delivered on credit. Failure to pay for the goods or services, according to the agreement, leaves the service provider with outstanding money. If the debt is left unpaid, the service provider suffers financial losses. In order to avoid substantial financial losses, the credit provider can use attorneys that specialise in debt collection and related litigation services to recover the money owed by the debtor.
Debt collection is a form of litigation, as the creditor has a claim against the debtor for failure to pay for goods or services delivered. The creditor can issue an account, but should the debtor fail to pay according to the terms of the agreement, the creditor can then issue the final demand for payment.
If the debtor still remains in default, the creditor can use debt litigation services offered by attorneys that specialise in such. The attorneys are instructed to draft and deliver a formal letter of demand. This is usually sent to the debtor by means of registered post. The lawyers, offering litigation services, give the debtor sufficient time to respond to the letter.
Failure on the part of the debtor to respond leads to the next step, which is the issuing of a summons. As part of the litigation services offered, the attorneys apply for a summons to be issued. The Sheriff delivers the summons to the debtor.
It is possible for the debtor to have moved from the original physical address, stated in the agreement with the creditor. In this instance, the attorneys trace the debtor and confirm the debtor’s physical address. The attorneys can use a recognised tracing agent to obtain a confirmation report of the debtor’s physical address. This helps to prevent a situation where the debtor argues that the summons has not been served at the correct address. It is one of the essential litigation services offered by such attorneys, as it helps to prevent further costs related to the Sherriff having to go from one address to another to ensure serving of the summons.
Once the debtor receives the summons, the debtor can admit the debt or defend against the claim. If liability for the debt is admitted, the debtor can enter an agreement to pay off the debt. The Court can order payment through an arrangement, or the debtor can sign an acknowledgement of debt. The creditor may choose to have the debt paid off over time, according to the new arrangement, to avoid further recovery costs.
The above is only a short introduction to the debt litigation services offered by our team of attorneys. View our full range of services, and call us for assistance with debt collection, tracing debtors, and litigating against debtors who choose to defend themselves against your creditor claims.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Call our attorneys for legal advice, rather than relying on the information herein to make any decisions. The information is relevant to the date of publishing.