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Debt Collection – Liquidated or Unliquidated Debt?

By Darrin Mitchell, Senior Associate at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

Is your debt collection for a liquidated or an unliquidated amount? What is the difference?

In a debt collection action, the debt is often defined by the amount specified in tax invoices issued for the supply of goods or services. Debt collection for these types of debts involves a “liquidated” debt. This is because the debt which is the subject of the debt collection is ‘liquid’, in the sense of having a specific monetary value. There may be an ability to claim interest in debt collection proceedings for a liquidated debt, but again this will be a defined amount and calculated in accordance with the terms and conditions of the agreement between the parties.

Debt collection for an “unliquidated” debt is quite different. This is where there has been a claim which requires quantification, such as debt collection for loss claimed by a party, or damages suffered where the amount of loss or debt is not certain. Unliquidated debt collection will arise when the amount a person has lost cannot be simply defined and needs to be the subject of evidence and determination by the Court. Examples of debt collection for unliquidated debts might include motor vehicle accidents or defamation claims.
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Collecting Money? Avoid Going It Alone!

By Ellen Ferris, a Solicitor in Matthews Folbigg’s Insolvency, Restructuring and Debt Recovery Group.

Collecting money, especially from people you know, is always a delicate business.

Collecting money requires you to be persistent, and all too often becomes something that we let slip to the back of our mind to avoid the hassle, inconvenience, and sometimes even embarrassment of chasing valued customers for unpaid debts. Certain debts, even large ones, can be placed in the “too hard basket”, and never followed up on. Certain timelines for recovering debts can then expire, or more simply, debts can be forgotten or ignored.

Matthews Folbigg Lawyers understand these issues. When it comes to collecting money we are very experienced, and know that handing over the problem of collecting money to lawyers is normally only considered after the last resort has failed. However, at Matthews Folbigg Lawyers we can go about collecting money in a way that suits your special relationship with your customers. Whether you would like a gentle reminder or a final warning, if you are not getting anywhere with your own attempts at collecting money, we would be happy to assist.
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