How to Avoid Bad Debt During Quarantine

The coronavirus has the whole world in its grip. Not only is public health at risk, but the global economy is being threatened as well. This is due to the fact that, in order to contain the virus, substantial measures are being taken worldwide. Borders are being locked down, events are being canceled and catering establishments, hairdressers, and other shops are being closed. Companies are hit hard by government measures. No work means no income. For many companies, therefore, the coronavirus crisis will also cause financial problems.

These measures are necessary, because our health comes first. However, they also raise other concerns for various entrepreneurs.

IS JUDICIAL DEBT COLLECTION STILL POSSIBLE?

In some cases, a judicial debt collection procedure may be the best solution. However, many entrepreneurs wonder whether legal proceedings are currently possible. Indeed, many countries are in lockdown, and this also affects the European courts generally, most courts only handle urgent procedures, while other legal proceedings have been postponed. Urgent procedures are often conducted online or without an audience. It is also possible to start a new procedure online

AVOID BAD DEBT:

Most businesses will have experience of customers who refuse to pay up or who pay their bills long after they are due.

• You can ask new customers for trade references or pay for an online credit check.

• Remind customers that you have a statutory right to charge interest on late payments (even if you do not plan to enforce this right).

• you may need to send it to the buyer for approval before it will be paid or direct to the company’s accounts department.

• Actively chasing overdue debts is a vital part of minimizing late payments. The sooner you do this the sooner it should be paid.

• Reconsider the terms on which you do business with customers that regularly pay late: for example, increasing the prices you charge them or canceling their credit facility.

• Involve your professional advisers if your attempts to recover the debt are unsuccessful.

Extremely important for your company that you receive the compensation you are entitled to, despite the coronavirus. This is why we will do everything in our power to achieve the best possible outcome in your debt collection case, even during these difficult times. Cases of debt recovery may therefore increase, but insolvent clients may have been affected by COVID-19.

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