Is your business operating from New York City facing bad debt issues? Well, you are not the only one. With the current economy, most businesses are worried about their clients not paying them on time. Here are simple steps that you can take to ensure that you are able to cover all or maximum money from your debtors.
1. Demand phase
The first thing you should do is start the demand phase. It is all about emailing, writing, or calling the customer so that you can remind them to pay. It is quite lucky if you can convince the debtor to pay during this phase. It is the least expensive. So, providing some incentives like negotiation or payment plans are worth it.
Also, you can hire a debt recovery agency in New York during the demand phase only. It will show the delinquent that you are serious about debt recovery, and if they don’t have, there will be consequences. Make sure you hire the best collection firm so that when the debtor searches on Google, they know everything about them.
The next steps in the debt collection process depend on what you agreed upon in the contract with your client. But they usually go like this.
2. Litigation
It is the next step irrespective of what your contract says. The location of both the parties and the amount of debt will determine whether a lawsuit in New York can be filed or not. It is also crucial for you to find a perfect court or you, having more than one court choice for your lawsuit filing is a good idea. Now, it depends on the court, and the amount of debt, what type of mediation you get. It can be ordered by a court one or a court-sponsored mediation program.
Also, the next step can be arbitration if that is what the contracts state. You don’t necessarily need a customer for this process. Whatever judgment the arbitrator takes, you need to show it in the state court.
3. Mediation
The contract between two parties may determine the need for mediation. It can also be a prerequisite for filing a lawsuit or arbitration. If the mediation is in the contract, it will take place outside the court in one of the places made, especially for this. The mediation process is a simple one. It requires every party involved in the dispute to agree for mediation.
The business who is looking to recover their bad debt will send an offer to the debtor for mediation. If they both agree, the process starts. Also, no party needs to agree to the terms of mediation.
4. Judgment
The last step means that the judgment came in your favor through one of the above methods. Now, you need to convey the same to the debtor and make sure that they pay the debt on time. If they don’t, the interest rate will be high, 9% to be exact in NY.
It is a tough battle so work on it immediately.
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