[According to the Law of Expediency] 60. Practical Methods for Collecting Outstanding Receivables from Business Partners

*This content was translated by AI.

When running a business, one inevitably encounters the issue of unpaid payments from business partners at some point.

This refers to so-called outstanding receivables, where delivery is completed but payment is delayed for months, or services are finished but the final payment is repeatedly postponed. Such situations immediately lead to liquidity shortages for SMEs (small and medium-sized enterprises) and small business owners.

One of the most common case types I frequently encounter in practice is disputes over unpaid goods and service fees. Clients consistently ask, "I've heard lawsuits take a long time; is there another way?" To conclude, litigation is not the only solution. However, selecting the appropriate procedure based on the situation can save both time and costs.

The first step to consider is sending a formal notice of claim (content certification). While it lacks legal binding force, it effectively communicates to the debtor the clear intention to proceed with legal action. In practice, there are numerous cases where debtors voluntarily settle after receiving such a notice. Since the cost is negligible, it is definitely worth attempting as a first step.

If the matter is not resolved through a formal notice of claim, one should consider a payment order (dunning procedure). The court filing fee for a payment order is only one-tenth of that for a lawsuit, and if the debtor does not file an objection within two weeks, it becomes legally binding with the same effect as a final judgment. This method is particularly effective when there is no dispute over the existence of the debt.

Additionally, if the claimed amount is 30 million won or less, a small claims trial is possible. In small claims cases, a unique system called a "recommendation for performance" exists; if the defendant does not object, enforcement authority can be secured within a few weeks. Even if a hearing is held, the principle is to conduct only one trial, so a significantly faster conclusion than a typical lawsuit can be expected.

Another point I wish to emphasize is the importance of preservation measures, specifically provisional attachments. Even if one wins a lawsuit, the judgment is merely a piece of paper if the debtor has no assets to execute against. By securing a provisional attachment on the debtor's real estate or bank deposits before the main lawsuit, one can prevent asset concealment or disposal, greatly increasing the likelihood of actual debt recovery.

Ultimately, the key to recovering outstanding receivables lies in "speed" and "preservation." The best strategy is to take appropriate legal action at the earliest possible stage and proactively secure the debtor's assets. If you are troubled by unpaid payments, rather than waiting aimlessly, I recommend seeking professional assistance to choose the optimal procedure suited to your situation.

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*This content was translated by AI.