Updated: Apr 19
If a debt collector has no proof of owning the debt, can they recover the said debt?
It is common for people to think that if there is no proof, then no collection or recovery of debt can be made.
But how far does this truth go?
Before we go any further, it is vital to understand what a debt recovery is.
Fundamentally, it is a legal action to recover debt from individuals or companies in the event of their refusals or delays in the payment of debts.
The process of this legal action is devised to ensure that any such action is taken on a timely basis without undue delay.
In other words, the faster someone initiates the legal action, the higher the chance for them to recover their debts.
In light of this, what can you do as a creditor or debt collector to recover the debt when you fail to provide supporting documentation in verifying the debt?
You may have encountered a situation where you had provided a huge sum of loan to your friends or acquaintances without entering into a proper agreement or a valid contract.
You unwittingly agreed to loan the money to the individuals interested in kindness and empathy because the person asking is someone you know personally.
In return, they promised to pay the debt only through verbal communication without entering into any contract whatsoever.
Sooner or later, they either disappeared or refused to return your money.
Now, you feel hopeless as you might think that there is no other way to recover the debt because there is no ‘black and white’ or, specifically, no valid written contract.
Is it possible to recover or collect the money without a valid contract or any written agreement? The answer is – YES.
The minimum documentation that needs to be provided includes any billing, receipt, or just about anything that can prove the transaction.
However, many of you might wonder that if the debtor is failed to be located, can I still proceed with the legal action? Yes.
Even if you cannot locate the debtor anymore, you may still initiate legal proceedings and obtain a judgment against the debtor.
In a situation like this, upon pronouncement of judgment against the debtor, you may apply to the Court to enforce the judgment against the debtor's assets, and the debtor may be summoned before the Court for an examination of the debtor’s financial status.
If the debtor still refuses to appear in Court, he or she can be arrested.
You might also want to consider the time frame for the process to obtain a judgment against the debtor.
From the issuance of a letter of demand to obtaining a judgment in default (JID) of appearance against the debtor, it takes approximately three months.
However, if the claim is disputed, i.e. defence is filed, the process could take about four to five months to obtain a judgment summarily.
It may also take a long time if the claim involves a full trial (need to call upon witnesses, etc.).
Nonetheless, the above time frames are merely estimations as they will vary depending on various factors, including the Court’s schedule.
In conclusion, no matter what the circumstances are or how difficult you may think it is to recover your money without having a written or proper documentation, you can find solutions accordingly by following the rule of law.
Our commitment here in EzriLaw Firm is to make sure that you succeed in recovering your debt legally or anything similar.
Note: This article does not constitute legal advice to any specific case. The facts and circumstances of each case will differ and, therefore, will require specific legal advice. Feel free to contact us for complimentary legal consultation.