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Personal collection tends to bring in immediate payment from debtors who are delinquent. Prompt
collection action especially important in those cases where there are indications of fraud. Statement of
account sent to all customers/debtors to remind their obligations are due and payment is expected.
Statements are sent to all customers once a month which usually falls on the first of the month
10 days overdue – call for another friendly reminder. At least, get specific date to pay
60 days overdue - 2nd collection letter. Remind and for referral to lawyer if non-payment within
10 days
90 days overdue – 3rd and final demand letter. For referral to lawyer (compromise settlement or
restructuring of account
1. Right to attachment – take the property (security) to the custody of plaintiff/creditor after count
judgement
2. Right to garnishment – creditor’s option to request from court a 3rd party (garnishee) to hold
and control property of the debtor during the legal proceedings
3. Right to receivership – remedy where the claim property is placed under custody of the 3rd party
(receiver-appointed by the court during proceedings)
Right to hold, control and dispose the property per court decision
Property may be disposed at auction and excess of claim shall be given back to
the defendant
4. Right to replevin – provisional remedy compelling the defendant to deliver to the plaintiff, any
personal property or merchandise loaned for non-payment of obligation. Delivery per court
order
5. Right to composition – is the will of the debtor at his own motion to voluntarily pay his creditor
certain portion of the claims in exchange for release from his liabilities.
Seller takes position of a creditor where full payment has not been paid, he is entitled to any of
the following rights:
1. Right to retain possession of goods – applicable when the goods have not been delivered or still
in the seller’s possession
2. Right to stop the goods in transit or stoppage in transit – available in cases where the seller has
parted with the goods or the buyer become insolvent and can be no longer pay his lawful
obligation
3. Right to resell the goods:
a. Seller may resell the goods when he stops the good in transit
b. If goods are perishable in nature and the buyer is in default, it is the price for an
unreasonable time
4. Right to rescind transfer of title and resume ownership of the goods:
a. Unpaid seller exercised his right to possessory lien, or
b. Stop the goods in transit
And the buyer has been in default in the payment of the price for an unreasonable period of
time.