The Three Positions of Debt
When a debt is owed, there are usually three ways to view it.
- The debt is legitimate and both lender and debtor agree on the amount
- The debt is legitimate but the lender and debtor disagree on the amount
- The debt is in dispute
Regardless of which one of these positions you find yourself in, the assistance of an attorney who understands collections and how to represent your position can be necessary.
You Agree to the Debt and the Amount but…
If you’re owed a debt and the other party agrees to it and the amount, but cannot pay that amount, then an attorney can assist in mediating with you and the other party to come to an agreement. One option is to reduce the amount of the debt to something the other party can pay, another would be to allow for payments to be made over a period of time until the debt is satisfied.
In some cases you might consider releasing the debtor entirely from the debt. There are some financial and tax implications that could be beneficial to your annual reports, but you would want to work with an accountant and tax attorney to make sure this is the right choice for you and your company. Whatever path you’re considering our lawyers are here to guide you down the right path.
You Agree There is a Debt, but the Amount…
You think one amount is owed, the other party thinks it’s another. The difference could make a huge impact on your bottom line.
Let our attorneys step in and help you come to an agreement both parties can live with. We can go through your documents and financial statements to ensure the amount is agreed upon and that you both have a plan going forward.
You Disagree on The Debt…
You believe the bill is owed, and they claim they don’t have to pay. Whether it’s a belief that services weren’t rendered, the debt was already paid, or any other scenario, when this is the situation, you need a professional to step in and address the situation. It’s possible you may have missed something, but a thorough document review will make sure.
It may be your client is holding out for a better deal. Having a tough negotiator on your side to make the demands necessary to compel action is a great way to get the results you need. If they’re confused, we’ll help show them the facts of the matter and assist you both in moving forward to address the debt and make the repayments necessary clear the slate.