Financial transactions are the bedrock of setting up a successful business. It involves borrowing money sometimes and sometimes lending money out of good faith. However, things turn sour when the person borrowing money from you does not pay you back on time. It would be best if you chased these debtors continuously, within the rules and regulations under the Fair Debt Collection Practices Act (FDCPA). This prohibits the creditors from harassing, abusing, or oppressing the debtor. It provides legal protection in case of unfair debt collection practices. Therefore, as a creditor, you adhere to all the rules and take legal action against your debtor by hiring a Chicago debt collection defense attorney. Read on to know about the steps of taking legal action against your debtor.
Initial contact
Creditors are entitled to ask about their money from the debtors. The FDCPA law allows debt collectors and creditors to contact debtors via phone, letters, emails, and other forms of communication. However, the frequency of contact should not violate FDCPA rules. The debt firm mentions the name of the creditor and the amount you owe and gives you an option on how to dispute the debt or come up with a repayment plan.
Issue letter of demand
A letter of demand is a formal document that can be issued to the debtor. It will act as a warning for potential legal actions against the debtor if the debt is not paid back on time. This step will force the debtor to contact you and negotiate. This letter can also be presented to the court during the hearing to show that friendly measures were taken to recover the debt.
Sell the debt
The creditor can write off your debt or sell it to a third party called an outside collection agency. The creditor will no longer be involved here. The collection agency will take the necessary steps to recover the debt to profit from the purchase.
Hire a lawyer
Hire a debt collection lawyer and sue your debtor for the inability to pay your money back. You can also take the help of your lawyer to devise a plan for the debtor so that he can make a minimum payment initially and then take his time to pay back.
No matter what, your debtor has to pay you back the money owed in some way or the other. They cannot simply get away with it. Take the legal assistance of a good lawyer who will assist you on dealing with these debtors and find a way out that serves your purposes.