At some point in time, borrowing and owing money is standard procedure for most businesses and individuals. The entity that owes money is deemed the ‘Debtor’, and the entity that lends money is known as the ‘Creditor’. It is common knowledge that Debtors often pay down their debt slower than the Creditor would prefer. That is why Creditors have a few different options to make sure that funds owed can be recovered on a timely basis.
Companies Who Owe Debts
One option that a Creditor can implement to pursue a smaller company’s debt repayment is to place a wind-up order on the firm. Since most debtors would prefer to avoid such severe legal actions taken against them, wind-up procedures usually spur them to repay monies owed as soon as possible.
When a Debtor still fails to repay monies to a Creditor after a legal Judgment against it, the next option available to the Debtor is to declare bankruptcy. Again, since bankruptcy proceedings are something that most business enterprises seek to avoid at all costs, the threat of the procedure is often enough to spur them on to repay the debt.
Even without a legal Judgment, a Creditor is free to pursue declaring bankruptcy on behalf of the Debtor but should be forewarned that most bankruptcy actions pursued without the Judgment come back “nulla bona” (no goods) by the Courts.
Ask Us for Advice
Our team of talented and knowledgeable professionals can provide helpful advice about how to recover unpaid debts. We’ll review your case and present you with all your options so you can make an informed decision about whether you would like to pursue the debt recovery claim. Call us today to discuss all your choices.