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Managing and dealing with your cash flow is very important for anyone in business, but a failure to manage bad debts may be highly damaging to a small business. As a small business, you must be always mindful of this situation, especially in the current economic climate.

The information in this article is for general advice only and may not be suitable for your situation. If you have any specific or particular questions you should make enquiries with your solicitor.

Unfortunately in the current economic climate, bad debts and commercial disputes become all too common. Most people are quick to rush off to see a debt collector, or a solicitor, however the problem with taking legal action is that doing so may be costly and time consuming. Before taking such a path, you should review and assess:

• If you have a clear, straightforward, and strong case
• If you do not have a clear case, if you need to obtain legal advice to consider your position
• If the matter can be negotiated and resolved
• If an lower value offer is made, is it reasonable to accept it rather than to start legal proceedings

Court isn’t necessarily the first place to go to resolve a dispute. Rather, it should be considered the last place to go. The court system is often, slow, procedural, adversarial in nature, inflexible, and costly. There is also the risk that you may lose the case and be subject to paying the costs of defending the case.

The last thing you have to take into consideration is the capacity of the debtor to pay. There is no point in wasting both time and money taking action and enforcement against a debtor who cannot pay.

Should you require legal advice, please do not hesitate to contact Phang Legal for a consultation.

About Phang Legal
Phang Legal is a progressive and dynamic law firm offering a different attitude to the practice of law and a different approach to the delivery of legal services. The firm continues to honour the traditions and standards of the legal profession, while remaining current and relevant to ever changing client requirements and expectations. Phang Legal provides cost effective and practical solutions across a wide range of practice areas including conveyancing and property law, corporate and commercial law, litigation and dispute resolution, wills and estates (elders law), legal aid and criminal law, and notary public services.

Contact Details
6/83 George Street, Parramatta NSW 2150 AU
PO Box 1375, Parramatta NSW 2124 AU
Telephone: +61 2 9687 8885
Facsimile: +61 2 9687 8883
Web: http://www.phanglegal.com.au