Evaluating debt collection records is a basic initial step that should be taken to increase the possibility of collecting a bad debt.

Imagine that you have a debt that needs to be collected. But the debtor uses many excuses to delay debt repayment, or has no respond, the debtor even claims that there is no debt, or more seriously, they make an opposite compensation claim against you.

To limit the above situations and plan to prepare before collecting debt, as well as increase the likelihood of successful debt collection, you should take time to evaluate your debt collection file.

Here are some debt collection evaluation suggestions for your reference:

1. For normal civil loan debt

• Consider the legal value of the loan transaction: Does the loan have documents or not? Are loan documents notarized/authenticated? Is that transaction a loan or essentially a gift/business partnership/or other transaction?
• Documents proving debt: Photos, videos, messages exchanged between parties, money delivery documents, bank transfer statements, are there any witnesses?
• Loan transaction content: How long is the loan term? Profitable or not? If there is interest, what is the interest rate? Is there a mortgage on the property?
• Is the debt disputed or not: What is the debtor’s current opinion? Is there a response to a debt collection request?
• Identifying debtors: Who are the debtors? Is there a marital relationship or not? Where is debtor’s residential address? Does the debtor have any assets?
• What additional evidence is needed before bringing the debt collection case to the State agency?

2. For debts from commercial business contracts

• Consider the legal value of the commercial contract: Is the signatory competent or not? Is the authorization to sign a contract valid? Does the contract have to be notarized/authenticated?
• Legal check of debt collection rights: Has the debt collection right arisen or not? Are there sufficient acceptance documents? Is the debt due for payment yet? How far has each party fulfilled its obligations? Are there any conditions attached to the payment obligation? What are the sanctions if payment is late?
• Debt information: Exactly how much is the debt? How long is the overdue period? Is there an agreement on late payment penalties and interest?
• Relevant documents: Acceptance documents, delivery documents, invoices, debt comparison records/or documents of similar value, is the person signing these documents competent or not? Exchanges between the two parties via official letters and emails? Are there witnesses?
• The debtor’s current situation: What is the debtor’s current opinion? Does the debtor have other production and business projects? Where is the headquarters address? Who is the current legal representative? Where is the cooperation project between the two parties implemented?
• Is the debt guaranteed by another entity? Is there a mortgage on assets?