One of the key challenges in modern business, both for entrepreneurs and companies, is the irregular collection of receivables. This problem directly affects business results and can lead to the illiquidity of creditors, and in extreme cases, even bankruptcy. Individuals can also have claims against their debtors based on various legal grounds (debt, loan, compensation for damages, unpaid rent from renting real estate, etc.), which the debtors are unwilling to settle voluntarily.
When a debtor refuses to settle their debt amicably, the creditor often needs the assistance of a lawyer who will represent their interests in the debt collection process. It is particularly important to note that all claims have a statute of limitations, and as such, creditors should not be inactive for an extended period because they expose themselves to the risk of their claim becoming uncollectible. It is recommended that creditors, after noticing the “first signs” which can be interpreted as actions by the debtor aimed at delaying the collection of the claim, immediately consult a lawyer who will provide adequate legal advice to protect their rights and prevent the expiration of the claim.
The lawyer’s involvement in these processes starts with negotiations with the debtor (sending a written notice to the debtor, contacting the debtor orally, contacting the legal representative of the legal entity or the person authorized to represent the legal entity, etc.) and continues until the final collection of the creditor’s claim through legal and/or enforcement procedures.
What is a claim and what is debt collection?
A creditor’s claim typically consists of the principal debt (the principal), statutory default interest calculated on the amount of the principal from the due date of the claim until the final payment, as well as any potential costs to which the creditor may initially be exposed, which can be related to the debt collection process (costs of the lawyer representing the client in civil and enforcement proceedings, public bailiff fees, court fees, expert examination costs, etc.). Creditors often have a misconception about the amount of their claims against third parties because many creditors consider “claims” only to be the principal amount, completely ignoring statutory default interest as a form of secondary claim, which in some cases (when the debtor fails to fulfill their obligations for a long period) can even exceed the principal debt. This is another reason why creditors are advised to entrust the debt collection process to lawyers who will strive to fully protect their clients’ interests and recover their claims as quickly as possible and in full.
Why is debt collection important for the liquidity of a company?
Liquidity is a crucial indicator of a company’s financial health because it enables the regular settlement of obligations to employees, suppliers, and the state. When receivables remain unpaid, the company may be forced to use its reserves or borrow in order to maintain daily operations, which further increases costs and reduces profitability. Uncollected receivables are particularly problematic for small and medium-sized businesses, where the delay of just one client can cause serious financial difficulties. This can lead to delays in paying suppliers, which further undermines business relationships and market trust.
Effective debt collection not only ensures a stable cash flow but also allows businesses to invest in new projects, expand operations, and innovate. Timely action and the engagement of a law firm specialized in debt collection are crucial to prevent prolonged court disputes and the loss of rights due to the statute of limitations.
Our office provides comprehensive support in maintaining business liquidity through legal advice, negotiations with debtors, and, if necessary, the initiation of legal proceedings.

Debt Collection Services Provided by Our Law Firm
The joint law firm Radoičić and Associates has extensive experience in debt collection proceedings. We pay special attention to these types of proceedings because debt collection is one of the primary goals of any legal or natural person. In this sense, we first attempt to collect the receivables extrajudicially, utilizing all available security measures that can be realized to recover the client’s claim. If extrajudicial debt collection is not possible, we take all necessary actions to achieve and collect the receivable through an enforcement procedure (court debt collection).
How can a debt be collected?
A debt can be collected in two ways: extrajudicially and judicially. Extrajudicial collection involves negotiations and agreements with the debtor without initiating a legal process, while judicial collection involves legal steps such as filing a lawsuit and enforcement. The choice of method depends on the debtor’s willingness to cooperate.
How does extrajudicial debt collection work?
Extrajudicial debt collection is extremely important. Reaching an agreement with the debtor using appropriate negotiation methods can shorten the collection process. Additionally, extrajudicial debt collection is a far more cost-effective and favorable option for the creditor, as the creditor will not initially incur additional costs that judicial debt collection inevitably requires.
Many times we have witnessed that claims, which initially seemed to be voluntarily uncollectible (because the debtor rejected all forms of communication with the creditor), can become collectible when a lawyer is involved in the negotiation process between the parties.
Activities we undertake in extrajudicial debt collection procedures:
- Sending letters to debtors inviting them to negotiations in order to resolve the due receivable amicably.
- Scheduling and attending meetings to resolve the dispute.
- Drafting legal documents that secure the creditor’s claim (guarantee, pledge agreement, mortgage, etc.).
- Sending a warning before initiating litigation or enforcement procedures (this warning is only drafted if none of the previously mentioned actions have yielded the desired results).
Judicial Debt Collection
Judicial debt collection is resorted to in situations where extrajudicial collection is not possible. Depending on the type of claim, the method the creditor will pursue to collect their receivable may vary. All claims are ultimately collected through enforcement (a special type of legal procedure). To initiate enforcement, the creditor must have an enforceable or authentic document.
What Are Enforceable and Authentic Documents?
The Law on Enforcement and Securing specifically lists what is considered an enforceable document (e.g., enforceable court decisions and settlements, enforceable decisions made in criminal or administrative procedures, mortgage contracts, etc.) and what is considered an authentic document (e.g., bills of exchange, checks, certificates of debt, etc.).
What to Do If You Don’t Have an Enforceable or Authentic Document?
If a creditor has a claim against a debtor but does not possess an enforceable or authentic document, they will need to initiate civil proceedings first in order to obtain a judgment (enforceable document) by which the court determines the basis and amount of their claim. Afterward, the creditor can initiate the enforcement process based on that judgment.
How Does the Enforcement Process Work?
The enforcement process is initiated by submitting a proposal for enforcement to the competent court. Once the court issues an enforcement order, the case file is forwarded to a public bailiff who will carry out the enforcement.
Legal Services We Provide in Enforcement Procedures:
- Filing proposals for enforcement based on enforceable or authentic documents.
- Continuous communication with the public bailiff who carries out the enforcement order.
- Conducting property checks of the enforcement debtor.
- Responding to objections filed by the debtor or third parties.
Debt Collection Based on Foreign Enforceable Documents
Debt collection based on foreign enforceable documents is a specific legal process that requires knowledge of both domestic and international rules on the recognition and enforcement of foreign court decisions. The foreign enforceable document must first be recognized by the domestic court through a special recognition procedure before it can be enforced in Serbia.
Who Pays for the Enforcement Costs?
Enforcement costs are part of the debt collection process and can significantly affect the final outcome for the creditor. The creditor initially bears the enforcement costs but can request reimbursement from the debtor once the court issues a favorable ruling.
Advantages of Hiring a Law Firm
Hiring a law firm for debt collection offers numerous advantages that significantly ease and speed up the process. Professional lawyers provide legal expertise and strategy, helping creditors avoid complications and potential errors in debt collection procedures. Our team has experience in handling complex cases, such as debt collection from bankrupt companies or international debt recovery.
Frequently Asked Questions
The creditor can initiate enforcement procedures, such as asset seizure, account freezing, or property sales
Yes, we provide services for both individuals and businesses.
Yes, other evidence such as correspondence, witnesses, or documented obligation records can be used.
Debt from companies can be collected through negotiations or judicial procedures.
Debt from companies can be collected through negotiations or judicial procedures.
Yes, claims have statute of limitations, and it’s important to act timely to prevent expiration.
Creditors must report their claims to the bankruptcy trustee within the prescribed time limits.