A leading construction supplier in the UAE supplied materials valued at AED 120,000 to a contractor who defaulted on paying the due amounts on the scheduled date.
The creditor followed up with the debtor for about 6 months without any result because the contractor claimed to have cash-flow issues due to delays in executing some projects.
The client then decided to hire a specialized debt collection agency in Dubai to manage the collection professionally while preserving good relationships with the debtor. They chose Quick Action to carry out this task.
Challenges
- The debtor was a valued client, so the creditor wanted to avoid damaging the business relationship or his reputation.
- The client refused any legal escalation and wanted the collection process to remain amicable.
- The debt was over 6 months old, making negotiations more difficult.
These factors created a dual challenge: recovering the debt while maintaining a positive relationship with the debtor without legal intervention.
Solution
Our team analyzed the claim carefully and designed a strategy based on soft collection practices only.
After reviewing the case, we found that the debtor delayed payment primarily to manage his cash flow, not due to unwillingness. He relied on the creditor’s reluctance to pursue legal action due to their strong business relationship.
Our debt collection team then engaged in professional negotiations. They had to balance friendliness with firmness, ensuring the debtor understood the importance of timely repayment while preserving their business relationship.
Through solution-oriented negotiations, we reached an agreement for a full settlement, satisfying both parties.
Results
The client was thrilled: just three weeks after starting the case, the full AED 120,000 debt was recovered in a single payment.
This success was achieved without legal escalation, while maintaining a strong and professional relationship between the creditor and debtor.
Key Takeaways
- Professional negotiation can recover aged debts without legal action.
- Maintaining strong client-debtor relationships ensures future business opportunities.
- Soft collection practices can be effective even when debts are over 6 months old.
Frequently Asked Questions
How long did it take to recover the debt?
Success rates vary based on factors such as the age of the debt, the debtor’s financial situation, the industry, and the effectiveness of the collection strategy. Experienced agencies can recover a high percentage of debts, sometimes reaching up to 80%.
Was any legal action required?
No legal action was required. The recovery was completed through professional negotiation and soft collection practices.
Did the client maintain a good relationship with the debtor?
Yes, the amicable and respectful approach ensured that the strong business relationship between the creditor and debtor remained intact.
What made the negotiations successful?
Success was achieved by understanding the debtor’s cash flow situation, keeping communication firm yet friendly, and adopting a solution-oriented strategy.
Can aged debts be recovered without legal escalation?
Yes. With the right negotiation strategy and professional handling, even debts older than six months can be recovered without the need for legal action.
