How to Recover Bad Debt Through An Debt Collection Agency in Delhi?
There will come a point when the amount you owe is too large for you to manage on your own. One of the reasons to engage a reliable debt collection firm or debt collection agency is to delegate this aspect of your business to professionals is to avoid situations like the one described above. There’s also the legal aspect, which can be tricky if you don’t know all of the compliance laws and nuances. When all of our efforts provide no results, we may consider consulting a professional. Similarly, when a company is having trouble recovering bad debts from late accounts, a collection agency is called in.
If your company/you have been unfortunate enough to be faced with bad debt recovery that appears unrecoverable, you must be experiencing a great deal of anxiety while also trying to find a solution.
Know Your Debtor’s Rights!
Whether it’s a financial or operational obligation, the bad debt can be recovered by enlisting the help of a qualified debt recovery agency or a legal consultancy firm that can start legal action against the defaulter.
The Only Way Out is to Make an Informed Decision!
In such situations, it is best to choose the most effective remedy, which can only be determined if you are informed of the many options accessible.
A professional recovery agency or legal consulting organisation may be the best bet for recovering bad debt quickly because it explores all options. It begins with attempting to mediate between the creditor and the debtor in order to reach an amicable agreement. Well-trained specialists are assigned to this task, and they approach the defaulter and attempt to persuade him to repay or face legal consequences.
Be wary of unregistered or phoney agents!
As the problem of bad debt grows, so do the number of agents and agencies claiming to be legitimate. The majority of them rely on brute force and resort to illegal means to persuade the debtor to settle the loan. Hiring such firms could put you in legal hot water.
Before taking action, write a letter (LBA – Letter Before Action)
Presenting an LBA to the defaulter is the first logical step toward recovery. LBA is a legal letter delivered by the creditor or his authorised representative to the debtor, providing all of the details of the debt to be covered as well as a request for payment.
An Effective Plan of Action
If processes such as arbitration, mediation, and LBA fail to yield a beneficial result, legal aid is the best alternative. If a creditor is unable to meet his financial obligations, or if a company’s liabilities exceed its assets, resulting in debt repayment failure, then action must be taken.
The Provincial Insolvency Act of 1920 and the Insolvency and Bankruptcy Code of 2016 are the most effective measures for quickly recovering bad debt. If the default value reaches one lakh rupees, the creditor may apply to the NCLT to start the insolvency process.
A Professional Legal Consultancy Firm’s Role
Contacting a reputable legal consulting agency will ensure that you are able to collect your bad debt within a reasonable amount of time and at a reasonable cost. These firms have legal specialists with a great deal of experience in successfully resolving such cases.
They will draught the insolvency petition first, and then it will be filed with the NCLT. Their skilled attorneys will appear and argue the matter, as well as follow up until the NCLT issues a final order. They will then proceed to collect the financial or operational debt from the creditor in the debtor’s favour.