People often believe it is too difficult to chase up debts and do not bother with debt recovery.
What people often do not appreciate is that:
- Debtors often repay money after receiving an initial letter from a lawyer, which is not an expensive process for a creditor;
- After a debt is unsatisfied within twenty one (21) days of being filed with the court and served, a creditor can apply for judgment to be signed against a debtor. Signed judgment then enables a creditor to interest on the judgment debt from the date judgment is signed and allows enforcement proceedings to be taken, including a warrant of sale or a warrant of arrest against a debtor.
- Signing judgment against a debtor can adversely affect their credit rating, which may only be rectified by them clearing the judgment debt.
- Legal costs and court filing fees can be recouped with debt recovery proceedings (although not in all cases/ circumstances).
- A company that owes a debt can be wound up if they do not satisfy a statutory demand within twenty one (21) days (there are also other consequences for a company that does not satisfy a statutory demand within 21 days of being served with it).