Talk Your Way Out of Bad Debt Problems
Specialists at Latimer Hinks Solicitors, one of Darlington and County Durham’s longest established law firms, believe communication can be the key to better debt management.
Rather than assuming that customers are financially stable and able to pay bills, Mark argues that simply communicating with clients can help business owners to understand those they trade with.
Mark, who has handled debt management issues since the Insolvency Act 1986 came into being, said: “On countless occasions, I find that a client has been left owed large sums of money by a customer which has gone out of business, and they had no idea there were any problems.
“Quite often, this comes down to the fact that they have had no real communication with the customer outside of the normal, day to day business transactions.
“It is important to create a greater relationship with customers, particularly those with whom any significant business is done, because these are the people whose problems can quickly spread to become your own.
“Regular contact with senior people within the customer’s organisation can help open up the lines of communication that can forewarn of a potential issue. Also, simply visiting the customer, or driving past premises can also help highlight impending problems, particularly when the business you are dealing with is highly visible, such as a car dealer or other retailer – if stock is dwindling, it is time to ask questions.
“Such communication doesn’t need to be aggressive questioning, simply talking business owner to business owner can create the type of relationship which highlights issues and allows forward planning to deal with them before they lead to bad debt.
“The other advantage of regular communication is that discussion with the other party can often lead to a better understanding of the assets of a business, which can be used to settle a debt, should court proceedings be necessary. This could also inform as to whether court is even worth the time and money invested in it.
“Should a debt situation arise, the best first course of action is to speak with a lawyer who specialises in debt recovery and insolvency issues, to ensure the best chance of success.”
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At Latimer Hinks we will provide clear, concise and practical legal advice to private clients, business and commercial clients and farmers, landowners and landed estates.
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