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Business Debt Recovery - Business Debt Recovery – the Terms of and Agreement

a settlement statement payment contingency statement confidentiality statement statement of no wrongdoing

In general, debt recovery is the attempt to secure repayment of a debt from a non or partially paying debtor. Business debt recovery simply refers to cases in which that debtor is a business rather than an individual. There are a number of techniques besides actual legal suit that can be used to put pressure on businesses who have either not paid for services rendered or who have not repayed moneys lent to them by other businesses. These may include things like telephone calls geared toward making new repayment arrangements, threats of legal action, or in some cases repossession of goods or services that have been not been paid for. Some or all of these functions may be handled either by a company’s in house collections department or by an outsourced collection agency.
The repossession of products that have not been paid for is easier to do when the goods are electronic ones. For instance, a company that has not paid for design of a website can have the web site shut down by a company that has sufficient technical saavy to do so. Presumably, they could also have more physical assets repossessed if the required legal processes were initiated. For example, a business that had not made the required payments for a company vehicle could have the vehicle repossessed until payment was made. However these measures are in a sense a legal action of their own since they are governed by specific laws and procedures, and most companies would rather not get involved in repossession type procedures if they can be avoided.
Regardless of the methods by which the initial stages of business debt recovery are undertaken, once the parties have gotten into contact regarding the business debt, an agreement needs to be arrived at concerning repayment. It is best if this agreement is in writing, not merely verbal. This agreement makes clear to both parties what is expected in terms of repayment and lays out specific expectations that will hold up in court should actual litigation still prove necessary.
Here are a few of the items that such a repayment agreement might include:

A Settlement Statement

This simply means that the agreement states that it is for the complete and final settlement of the business debt. It states that any and all damages and liabilities are to be dissolved by successful completion of the agreed upon debt repayment plan.

Statement that the settlement has been negotiated

This item states that the settlement is the result of negotiations, not imposed legally or by external parties. It is important that both business entities enter willingly into the business debt recovery agreement, or claims of coercion or unlawful debt recovery procedures could come into play.

Payment contingency statement

This lays out the actual terms upon which satisfactory repayment is contingent. There may be the stipulation of a check issuance or wire transfer of the specific debt amount (with the inclusion of interest or other fees) and a statement that when this payment is received the debt will be considered satisfied. It is necessary that this be spelled out quite clearly to avoid disputes over acceptable forms of repayment and so on.

Statement of agreement not to sue

This states that upon satisfaction of the repayment agreement, neither party (in the case business entity) will initiate any legal proceedings against the others, either presently or in the future. Both businesses need to know and have down in writing that the agreement will satisfactorily resolve the matter form a legal standpoint.

Confidentiality statement

Both parties agree that no disclosure of the terms of the agreement will be made to the accountants, legal counsels, financial advisors, etc. of either party unless required by legal subpoenas and so on. This protects both from the unwanted interference of outside agencies that may see the debt recovery process as some means for added financial gain.

Statement of no wrongdoing

This statement is a kind of general blanket statement that agrees to the fact that neither business involved in the repayment agreement will consider that the other has done anything either legally or morally wrong. This protects the parties not only from future litigation but from slanderous or a disparaging allegations that could hurt their reputations.

There are a few more statement categories such as miscellaneous items regarding the contract, and specifications regarding the transfer of physical or intellectual property if some sort of garnishing or repossession has taken place.
These are the basics of a business debt recovery agreement. Businesses collecting debts from other businesses must have a good legal position to fall back on if the process does require actual court action. Business debts can be settled as easily as personal debts if both parties act cooperatively and honestly.

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