Debt Recovery

 

Our Philosophy

In the majority of collection cases, companies or individuals fail to pay not because they do not want to do so. Rather, they are unable to do so.

These debtors have a limited amount of funds which are insufficient to meet all their existing financial commitments. Who they pay first (or at all) depends on the type of debtors they are and the techniques being used.

To enhance your likelihood of receiving payment, we employ our tried and tested trio of tactics, namely profiling, persuasion and positive pressure.

Our Practice

All new clients are firstly interviewed by one of our solicitors to better understand the nature/vagaries of the clients’ industry, to identify the clients’ commercial considerations/unique circumstances and to evaluate the best general strategy to be adopted for that particular clients’ collection cases.

To enhance the likelihood of successful recovery, it is important that our clients are inculcated with a basic understanding of debtor types (e.g. payment patterns, debtor demeanour etc) and a preliminary overview of the Court processes (e.g. evidentiary requirements to substantiate claims, procedural timelines, enforcement options etc).

We support these by conducting workshops, seminars and/or legal clinics for our clients’ credit management/accounts personnel and updating them on the latest developments in the relevant areas of law.

Our Programmes

Whilst bad debt cases are easily identifiable by routine efforts, successful collection are mainly realized through skilful employment of effective techniques.

Time must be invested in assessing the debtor’s financial circumstances (e.g. assets available for attachment/their anticipated income from their trade debtors) and profiling the debtor (e.g. their concerns about adverse publicity brought about by debt litigation).

We review our clients’ proposed/existing contracts with others to evaluate and recommend precautionary measures to be provided/added in these agreements (debenture documents, bank and personal guarantees, credit limitation and application procedures etc).

Through our continual client-education processes, our clients’ personnel will be able to inform us of the debtor’s profile for our credit enforcement to formulate the best methodologies to use for engaging a particular debtor.

In most cases, our approach can be categorized as two (2) distinct phases:-

  1. Persuasive Pitch

    Within one (1) working day of being instructed and enabled (with sufficient information) to pursue a claim, a letter of demand will be issued and delivered personally to the debtor. Our service clerk will at the same time conduct a field survey of the debtor’s premises (e.g. whether vacated or, if occupied, whether there are goods or equipment available for attachment) and prepare a service report of his/her observations.

    If no payment or response is received by the expiry date of the letter of demand, our credit enforcement executive will, if a telephone number is provided to us, attempt to contact the debtor (in the case of the debtor companies, one of its officers). We will explain that we are making a courtesy call to notify them that our clients will be compelled to proceed with legal action as there has been no payment and also try to get an indication of the debtor’s position (e.g. whether they are disputing the debt or merely not able to pay at the moment).

    If cashflow problems appears to be the cause of the non- payment, we would then attempt to persuade the debtors to send us their written proposals on how they intend to settle the monies due and owing for our clients’ consideration.

    Alternatively, our clients may have given us a prior mandate to negotiate the terms and conditions of an amicable settlement/instalment plan on their behalf with the debtors. In such cases, we will proceed to prepare a suitable agreement to record the terms and conditions between the parties for the debtor’s execution and monitor the follow-up payments until the debt is recovered.

  2. Positive Pressure

    On the other hand, there will be occasions when the debtors may not respond as quickly to the above amenable approach and firmer steps may have to be taken to achieve results.

    For such cases, as time is of the essence, the solicitors in charge would usually recommend (where possible) agreed instructions for various scenarios (e.g. if we have ascertained from clients that no payment received by expiry of the letter of demand, a Writ of Summons would be issued forthwith. Conscientious steps will then be taken to attempt to obtain a default Judgment at the earliest opportunity. Negotiations for amicable settlement will only be entertained after a judgment has been obtained.)

    The greater majority of debt collection cases are non-contentious and the non-payment is simply precipitated by the debtor’s tight financial situation. However, in cases where the debtors dispute that payment is due, the solicitor in charge would very quickly assess the nature and substance of the matters in contention and refer the case for the appropriate attention and action by either a specialist department (e.g. our Building & Construction) or one of our dispute resolution teams (where the lead counsel would be a senior lawyer who is experienced in court, arbitration and mediation work).

    Where necessary, we would assist to arrange the appointment of technical consultants to give their professional assessment of the substantive dispute as the team formulate the dispute resolution strategy.

    Where private liquidation of the debtor’s assets is viable, we would also work in tandem with a member of our panel of associated accounting firms to ensure that this is carried out in a timely and diligent manner.

    By streamlining our engagement of the opponents, we ensure that even these contentious matters are dealt with efficiently and expeditiously at reasonable rates.

Our Prices

As the majority of debt collection cases would not be disputed or involve contentious court proceedings, we are able to predict and streamline the steps to be taken and standardise our professional fees and charges according to an agreed scale with our clients.

We constantly review the frequency and volume of cases given by our clients and, where appropriate, we will consider favourable revisions of the agreed scale. With regards to contentious matters, we appreciate that clients frequently need to make provision for such costs. To this end, we would usually endeavour (whenever possible or practicable) to provide estimates of our costs at different stages for various scenarios.

We know we can help. Let us.
Solicitor-in-charge : Bernard Chiu