As a debt recovery lawyer, I often get asked about the "probability" of recovery. While it's challenging to provide an exact numerical percentage, we primarily consider three factors to determine the viability of recovery:
Solvency: If the debtor is insolvent or bankrupt, the case is usually "dead on arrival" and irrecoverable. In nearly a decade of experience, I've only seen two instances where a client successfully recovered money from a debtor undergoing winding up.
Existence of Defence/Counterclaim: Many cases involve debtors who have specific reasons for non-payment, such as defects in the quality of work or goods sold, or a counterclaim against our client for damages caused.
Debtor Cashflow: Even if the debtor is solvent and has no defence or counterclaim, it’s rare to find debtors who can pay off debts in one lump sum. Typically, debtors will negotiate a repayment schedule, and we leave it to our clients to decide whether to accept, reject, or counter-offer regarding the duration.
Comments