Debt Collection in Greece
Chasing up late payments is a regular chore for most businesses that sell on credit. An effective approach to debt collection helps boost cashflow and reduce the risk of overdue payments turning into bad debts.
Late payment first steps
Issuing invoices and regular statements should be a standard part of your credit control routine before a payment even becomes overdue. Once a payment deadline has been missed, quick action to chase debts is essential.
A personal phone call is often the most effective way to chase an overdue payment. With experience, it can be very easy to identify genuine reasons for non-payment and simple delaying tactics. If there is any kind of problem or dispute, try to resolve it straight away. Persistence and a positive attitude often pay off.
Before starting more formal debt recovery proceedings, its worth assessing the situation. If the customer is in serious financial difficulties, or if the amount involved is small, you may decide simply to write it off as a bad debt.
Handing problem debts over to a debt collection agency can be a quick and easy way to recover them. You can use a debt collection agency regularly or on a one-off basis.
Alternatively, you can use a factoring service to manage your accounts receivable. As well as chasing late payments, the factoring service helps finance outstanding invoices.
Using a debt collection service can be a less confrontational way of chasing late payments than taking court action. A reputable debt collection agency can chase late payments in a professional manner, without alienating the customer.
Legal action to recover debts
An alternative approach to debt recovery is to prepare to take court action. The first step is to send a formal letter to the customer letting them know what you plan to do. A letter of claim advises that you intend to sue them unless they settle their account by a specified date.
For debts worth more than 1.000 , you may instead issue a statutory demand for payment. If the customer does not dispute the debt but still does not pay, you will be able to ask the court to wind up their business (or make an individual customer bankrupt). This statement of intent to make your non-paying customer insolvent can have a powerful effect if the customer can afford to pay you.
Simply issuing a letter or statutory demand may be enough to prompt payment. If not, you will need to be prepared to go to court to recover the money you are owed by submitting a law suit.
AUTHOR: Socrates Vrysopoulos
Copyright Vrysopoulos Law Firm
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Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.