A lawyer can help you if you are either a creditor or a debtor by:

• taking your instructions;
• writing to the other party or their lawyers on your behalf;
• drafting court documents and applications;
• representing you in negotiations; and
• representing you in court during any legal action.

Many debt collection matters may appear simple but there are often cases where an apparently simple matter will contain complex facts or difficult legal issues. Lawyers are trained to apply the law to your specific circumstances and help you deal with the often confusing debt collection laws and procedures in your state or territory.

It is important to note that your ability to recover a debt will depend to a large extent on the business practices you adopt before bringing your debt collection issue to a lawyer. Some factors which will determine your ultimate success or otherwise in business debt collection include:

• how prudent (sensible) you have been in giving out credit;
• the quality of your documentation particularly with regard to credit applications or director’s guarantees;
• the quality of your document trail including the ability to produce copies of invoices and delivery documentation on request; and
• how careful you have been in the debtor follow-up process especially in regard to documenting promises of payment and payment plans.

There are some cases when a letter of demand from a lawyer will convince a debtor to pay what they owe. This type of letter may be taken more seriously than yet another reminder call from you or your secretary. A lawyer can also give you advice about:

• your legal options for debt recovery;
• your prospects of success if you take your claim to court; and
• the approximate cost of each option.

You may also come across complex legal and administrative debt collection problems that will take up a lot of time and impact on your ability to fulfil your regular business obligations. A lawyer is able to:

• take on these matters for you;
• recognise potential issues at the earliest possible stage;
• give you advice about dealing with them; and
• act on your behalf and in your best interests in accordance with your instructions.

This enables you to continue the everyday running and functioning of your business without having to worry about the debt collection issue you face.

In all states and territories if you are trying to get a debt paid or avoid paying a debt you must:

• comply with the relevant state or territory laws as well as court rules; and
• use the correct legal documents.

This is yet another reason why you should seek help from a lawyer when facing a debt collection issue. Lawyers have been trained to understand all such complexity, to competently draft such documents and explain them to you along the way.