What are recovery and debt laws?

Recovery and Debt Laws prescribe rules and penalties to proceed against defaulting debtors.

When would you need to recover debt?

From a loan, credit line or accounts receivable either in part or whole, when the debt cannot be recovered, it becomes bad debt. Additionally, when the enterprise or the asset that becomes owed to repay debt cannot do so anymore, there arises a need to recover debt.

Methods for Debt Recovery

There are a lot of methods to recover debt, some are classified as legal, while others are non-legal. Non-legal methods for recovery of debt may include the calling the client or customer for amicably or hiring commission agents for recovering debts. Legal methods of debt recovery include:

• Civil Remedy: For civil remedy, an aggrieved party can send a legal notice to the debtor for initiating a civil suit for debts due or damages.
• Criminal Remedy: An aggrieved can file an FIR in the local police station having jurisdiction over the matter, when the case is serious. Post the FIR a criminal case shall be filed and the proceedings will be set in motion.
• Out of Court Settlements: For a quick and efficient way, under this category, the aggrieved party can resolve the dispute and recover money through mediation, arbitration or negotiation.