Here are some tips from a Chicago business debt collection attorney on what companies can do
to protect themselves from customer bankruptcies:
Require credit applications – require customers to provide you with a detailed credit
application in writing that has been signed by an officer of the company.
Check credit history – always check a potential customer’s credit history prior to extending
credit by obtaining a credit report from Dun & Bradstreet and scour it for any potential red
flags (late payments, nonpayment, etc.).
Get updated credit information – a customer who was a good credit risk five years ago may
not be in good financial shape today. Ask for updated credit information periodically.
Ask for a guarantor – if you are concerned about a customer, ask if one of the principals can
guarantee the debt.
Get collateral – requesting a security interest in the form of collateral may allow you to
recoup the debt in case the customer files bankruptcy.
Cash checks promptly – bank your checks as soon as possible, as the law states the money is
not yours until the customer’s bank clears the check.
Require money orders, COD or cashier’s checks – taking a business or personal check from a
business in trouble is asking for trouble for your own business.
Keep accounts current – if you are having problems collecting from a customer, ask a business
debt collection attorney for help in clearing up your collection problems.
The Jayaram Law is a Chicago business law firm providing a range of legal services
to middle-market businesses, with an emphasis on business litigation, business to business
collections, local counsel representation, preparation and review of business transactions, and
copyright and trademark licensing.
The Jayaram Law routinely and successfully assists its clients in their business-to-
business collection needs. We take pride in obtaining payment on accounts receivables without
fracturing critical business relationships or engaging in time-consuming and costly litigation
efforts. If you need business debt collection services conducted in a professional manner,
contact our B2B debt collection law firm.