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  • Xservice Debt Collection

What Should You Do Before Legal Action to Collect Debts

At Xservice Debt Collection, we receive many enquiries regarding debt recovery and the relevant legal proceedings. As an one-stop-shop for all our clients’ debt collection needs, we have the capacity for legal actions, no matter you'd like to do self-represented litigation or via our partnered law firms to collect debts. However, legal proceedings should not always be initiated at the start of debt collection. Here we share a few steps that we recommend taking prior to the legal process.


Internal Debt Recovery

While some business owners may know the legal reasons behind it, most others may take it as general business procedure that businesses should make a reasonable effort to resolve the issue before launching legal proceedings. It includeing but not limited to reasonable efforts to reduce your losses, demanding the payment, and allowing the other party to have a fair opportunity to settle the debt with you.


What to do before legal action in collecting debts

Professional Debt Collection

Consider outsourcing the debt to a professional debt collection agency after you have tried to recover the debt internally, which is usually recommended within 60 days of being overdue.Generally speaking, debt collectors are a cost-effective way to recover delinquent debts. Unless you are owed a huge amount for a single debt (eg over a million dollars), debt collection costs on a commission basis would be relevant to your budget, especially here at Xservice Debt Collection, where we are operating on a "no win, no commission" basis, which could minimise your risks of losing more money on costs. Business owners would have an opportunity to collect debts without making prepayments.

For each debt assigned to Xservice Debt Collection, our active debt collectors will utilise our professional resources to collect your money in a legal and efficient manner. Friendly to small businesses and medium-to-large enterprises, no matter what your situation is, we can help.


Legal Proceedings

Although the average success rate is very high with Xservice Debt Collection, there are still instances where legal proceedings may be the last resort to recover your debt. Our active debt collectors would evaluate your case with the debt collection procedures moving on, and provide you with the right recommendations after assessing your debt documents, the debtor’s assets, your chance of wining, and the costs involved.

After determining whether it is cost-effective to pursue legal action, we’ll speak to our client and explain the reasons. Should legal proceedings be recommended to take, we’ll let you know the cost estimate and procedures moving forward.


There are many ways to recover overdue debts, we believe that debts should be collected without going to court whenever possible. Although the above recommended steps are not necessary to be taken before legal action, the court/tribunal will not take a favourable view if you have not taken reasonable steps to resolve a dispute prior to issuing legal proceedings. Speak to our consultant if your client is not paying invoices in Australia, lots to think about and it's wise to speak to a professional.

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