Whenever a business in Westchester County enters an agreement with another organization, the business should always think about how it will be sure that it will get paid for the goods or services it sells.
After all, even in a strong economy, organizations fail or run into cash crunches all of the time. In other words, even if it had every intention of doing so, the commercial buyer of a business’s products may not be able to pay as expected for any number of reasons.
Of course, the business that sold the goods or services is counting on payment for them. Even one bad account can hurt a New York business, sometimes significantly. Over time, issues with payment can hurt the overall financial health of the business.
This is why businesses need a commercial collections strategy for when other organizations run into hard times.
To some extent, preplanning by getting appropriate financial security is key. For example, when negotiating with a commercial buyer, the business may want to make sure that its contracts include appropriate collateral, personal guaranties and the like.
Even with a developed strategy, creditor litigation may be necessary
Even if a business has taken the right steps to be sure it will get paid, no collections strategy is just automatic.
A business will have to take some steps to enforce their rights. They may for example have to go through a legal process to seize and sell collateral or to enforce a loan guaranty against a defunct business’s leadership.
In some cases, the best option for a business is to try to negotiate a deal with the other organization outside of court.
However, to protect its creditor rights, a business will often need to file an appropriate lawsuit.
A business trying to collect on a commercial debt should be sure to understand all of its legal options and alternatives.