Collecting unpaid debts is essential for the success and stability of businesses in Georgia. Unfortunately, it is not uncommon for creditors to face hostility and judgment when simply trying to recover the money they are owed. Rather than back down, it is important to understand creditors’ rights and which collection options may be appropriate.
It is possible to try and collect an unpaid debt outside of the court system, one of the most simple ways being contacting a debtor directly to ask for payment. When this does not work, a creditor may choose to use a debt collection agency. These agencies can be helpful, but they are also tightly regulated by the Fair Debt and Collection Practices Act. Should an agency violate the FDCPA, a debtor could seek compensation for damages. The FDCPA usually does not apply when a creditor is trying to collect on his or her own debt.
Should neither of these approaches work, a creditor may also choose a secured transaction. In a secured transaction, a debtor plans to sell some of his or her property to ensure payment of a debt. The debtor must first give his or her creditor a claim on the property. It is not uncommon for there to be competing claims over any resulting proceeds. A creditor can become a secured creditor by filing specific documents, and will take priority over unsecured creditors who are also making claims.
There are also court based remedies, although barring extreme circumstances it may be preferable to exercise options such as collection agencies and secured transactions first. Deciding which approach is best can be difficult though, and it is not always clear when it is time to try a new method. Some people in Georgia find that speaking with an experienced creditors’ rights attorney is helpful during this process.