TITLE

LEGAL ASPECTS OF DEBT COLLECTION

AUTHOR(S)
Millmore, Andy
PUB. DATE
September 1993
SOURCE
Accountancy;Sep93, Vol. 112 Issue 1201, p38
SOURCE TYPE
Trade Publication
DOC. TYPE
Article
ABSTRACT
This article discusses the legal aspects that a creditor must consider in collecting debt. The last step in a debt collection exercise is enforcement, like translating a court judgment into money and thereby repaying the original debt. This means that serious consideration must be given at the outset to the debtor's worth and assets. This might sometimes show that proceedings will do nothing more than throw good money after bad. After deciding to do something, the creditor's next decision is whether court proceedings by way of writ are appropriate or whether the debtor is not paying because it is insolvent and should therefore be wound up. It should be remembered that winding up is one of the available means of enforcement. There are advantages to the statutory demand route. The form is relatively simple and hence cheap to complete and serve. Its receipt sometimes has a cathartic effect on the debt. If the debt is not paid within 21 days, the debtor is deemed to be unable to pay its debts and a winding-up petition may be presented on that basis. The disadvantages include the fact that it is the opening move in insolvency proceedings. Once these are actually instituted the original petitioning creditor can quickly lose control.
ACCESSION #
9402171910

 

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