How to quickly and effectively recover your money

INTRODUCTION

In many situations, businesses face the unavoidable problem of not getting paid on time, especially in times of bad economy. Seeking legal assistance is beneficial to recover these debts. Prior to that, however, businesses can take certain steps to ensure there is a high chance of recovery of their debts.

This article explores strategic approaches to streamline the money recovery process, providing actionable tips for individuals and businesses navigating these financial challenges.

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FOUR STEPS WHICH BUSINESSES CAN TAKE

1. Documentation and Records

One of the first steps in expediting the money recovery process is to gather and organise all relevant documentation. Having a clear record of transactions, agreements, invoices, receipts, and any communication related to the owed amount strengthens your position in seeking recovery. This comprehensive documentation not only serves as evidence but also streamlines the communication process with the party in question.

2. Communication and Negotiation

Having effective and transparent communication with stakeholders is essential for any business. This includes fostering a good working relationship with your customers or clients, as it can be a way to resolving financial disputes early. Initiate a conversation with the party involved, clearly stating your concerns and expectations for repayment. Negotiation can often lead to mutually agreeable solutions, such as establishing a new payment plan or renegotiating terms. Professional and amicable communication can pave the way for a faster resolution.

3. Letter of Demand

Should the second step fail, a letter of demand should be sent to the debtor. Although a letter of demand is not required by law, its importance cannot be understated. A letter of demand serves as a formal written document that clearly outlines the details of a demand, including the amount owed, the basis for the claim, and a specified timeframe for compliance. The formal and professional tone of a letter of demand underscores the seriousness of the matter, and hence can act as a deterrent as it would encourage the debtor to address the issue before legal action is initiated. Further, a letter of demand is a written record which can be essential if legal action becomes necessary. This is because a letter of demand can serve as important evidence in legal proceedings.

4. Legal Action

When the above means fail, legal action becomes necessary. Consultation with a lawyer can provide insights into the available options for legal recourse. Depending on the amount involved and the nature of the dispute, small claims court, mediation, or arbitration may be viable routes to consider. Understanding the legal avenues available in your jurisdiction is essential for an effective strategy. This is where proper documentation and record-keeping as outlined in the first step above will be necessary.

When a legal action is filed in court, the person making the claim is referred to as the Plaintiff, and the person being sued is called the Defendant.

Once the claim is filed and extracted from the court system, the Writ and the Statement of Claim shall be served on the Defendant, who then has to enter appearance (to inform the Court and the Plaintiff that they intend to contest the suit) within 14 days.

If the Defendant does not enter appearance, a judgment in default can be obtained. A judgment in default is an “automatic” judgment granted in favour of the Plaintiff, without the Plaintiff having to prove his case on merits. Once such judgment is obtained, the Plaintiff can commence enforcement proceedings to compel the Defendant to pay.

Even if the Defendant does enter appearance, the Plaintiff has the option to file an application for a summary judgment. This is a summary procedure under the Rules of Court 2012 to obtain a judgment without the need for parties to go for a full trial. Summary judgment is only granted in clear and straightforward cases i.e. where there is no triable issue.

If there is no summary judgment, the case will ordinarily go for full trial. The parties will then have to adduce the relevant documents and witnesses, as well as make arguments to support their respective cases. The court will then deliver its judgment either in favour of the Plaintiff or the Defendant.

Even where the parties have commenced legal action, they are still allowed to reach an out-of-court settlement before the court delivers its decision.

CONCLUSION

Recovering your money quickly and effectively requires a proactive and strategic approach. By maintaining clear records, fostering open communication, exploring the available legal options, individuals and businesses can navigate the complexities of financial recovery with greater ease. Remember, a well-thought-out strategy not only expedites the recovery process but also strengthens your financial practices for the future.

After successfully recovering your money, it is important to take the opportunity to review the circumstances that led to the situation. Disputes can often be avoided or mitigated with good financial agreements and contracts. Continuous learning and adaptation are key to preventing similar challenges in the future.

‍This article is written by  Raja Nadhil Aqran (Partner) and only contains general information. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such.

If you would like more information on how to improve your contracts, or require assistance in claiming for outstanding debts or defending against any claim for outstanding debts, contact us at info@aqranvijandran.com.

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