Possibility to charge the debtor with the costs of debt collection
A creditor, when deciding to enforce his receivables with a debt collection company, must be aware of the costs of pre-trial debt collection - the very order of debt collection or preparation of requests for payment constitute additional costs. However, if the creditor takes care of the possibility of charging the debtor with the costs of debt collection - can get them back.
Is it possible to charge the debtor with the costs of debt collection?
Every entrepreneur in the course of running his business has certainly encountered the problem of an unpaid invoice or bill on the part of his client. This problem particularly affects companies from the small and medium-sized enterprise sector, as they usually do not have specialists in debt collection among their employees, therefore they increasingly use the services of external debt collection companies. As it is not difficult to guess, the main problem of this solution is the costs of such services, which cannot be covered by the debtor in principle, and it is the creditor's responsibility to pay for the services provided.
Possibility to charge the debtor with the costs of debt collection - legal regulations
A well-known principle in force in the entire civil law - the principle of freedom of contract allows the debtor to be charged with the costs of the recovery. For this to happen, the contract concluded between the entities making the transaction (entrepreneur / customer) should contain a provision, in the event of delay in payment of the debt, the creditor has the right to commission an external company at the recipient's expense, including sending requests for payment and charging costs for these activities of the debtor. At the same time, it is important to determine the costs of future debt collection already at the stage of creating such an agreement.
At the stage of constructing the above provision in the contract, it is worth looking at the counterparty's reaction. If he definitely does not agree to such a solution, we can guess that he is not sure of his solvency or timely payments.