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  • Xservice Debt Collection

Liquidated Debt or Unliquidated Debt? What Are the Differences in Recovery?

In terms of debt collection, a liquidated debt is one with clear and specified amount that is agreed upon, for example, an outstanding invoice between creditor and debtor (where there is no dispute). In contrast, an unliquidated debt means the debt amount is depending on another event, for example, if the creditor wants the debtor to pay for its legal costs during a debt collection procedure, then such legal cost is an unliquidated debt, because the amount of the cost is depending on how many hours the debt recovery lawyers spending on the case.

Liquidated debt recovery

For debt recovery purpose, a liquidated debt is simpler, and the success rate is higher. Generally speaking, the process to recover a liquidated debt is straight forward. Whereas an unliquidated debt can be challenged by the debtor, and if there are disputes about the unliquidated debt, a clearly defined contract or writing evidence would be important to resolve. And the type of debts can be changed during debt collection process, say if someone owe you money, and the debtor disputes the amount owing, this is an unliquidated debt, however if there is an agreement between you and the debtor specifying how the amounts are charged, or your debt collection agency help you to enter into a settlement agreement with a specified amount, then such debt is liquidated.

Compare to the straightforward process in recovering liquidated debt, negotiations and experiences are more important to collect an unliquidated debt. At Xservice Debt Collection, our debt collectors are cross states licensed and experienced to deal with both liquidated and unliquidated debts. Operating across Victoria, New South Wales, Queensland and Western Australia, no matter where you are, we CAN help. If your client is not paying invoice, get in touch now for a professional and active debt recovery services.


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