At Bangkok Business Lawyer, we specialize in business law and offer practical advice for business owners on how to handle outstanding trade debts. Here are some straightforward steps you can follow:
1. Prepare Information and Verify Evidence
Gather all relevant documents, such as business contracts, service orders, purchase orders, invoices, proof of work or delivery, and debtor information, including names, addresses, and payment terms. Additionally, review the invoices, outstanding amounts, and any penalties for late payments.
2. Verbal Debt Follow-Up and Negotiation
Start by contacting the debtor verbally to inquire about the reasons for non-payment. Use polite and professional language. If the debtor has valid reasons, consider negotiating new payment terms, such as extending the payment deadline or restructuring the payment plan. Draft a new payment agreement for the debtor to sign, acknowledging the debt.
3. Written Debt Follow-Up
If verbal follow-ups are unsuccessful, prepare a formal written demand letter. This letter serves as evidence of your efforts to collect the debt and can be used in court if necessary.
4. Legal Services
If previous steps do not resolve the issue, consider hiring a law firm with business law expertise. A business lawyer can analyze the situation and take appropriate legal action. They have the experience and techniques necessary for effective debt collection and litigation, including issuing debt collection documents and filing lawsuits.
Reducing Trade Debt Risks
To minimize the risk of trade debts, business owners should have business contracts drafted by a business lawyer. These contracts should be comprehensive, precise, and fair to both parties, protecting rights and ensuring mutual understanding.
Contact us HERE for expert advice and professional services in handling outstanding business debts. Get a free initial consultation today!
