The Most Effective Way to Avoid Debt
Debt prevention is one of the most effective ways to avoid debt and its consequences. It involves a set of measures aimed at preventing long-term debt from arising. These measures should be applied at the early stages of debt prevention. Their goal is not to deal with existing debt but to stop it from occurring in the first place.
Every debt disrupts business operations: it affects cash flow, delays investment projects, and worsens relationships with both suppliers and customers. Therefore, attention should be given not only to recovering existing debts but also to preventing their emergence — particularly for companies operating in Lithuania.
By implementing effective debt prevention strategies, companies in the Republic of Lithuania can significantly reduce the need for forced debt recovery, making the process faster and more cost-efficient.
An effective debt prevention strategy is to turn to professionals or firms specializing in debt recovery. These individuals, by their roles or licenses, have the right to access data on individuals and legal entities from relevant registries. Potential debtors, seeing that a professional is managing debt on behalf of the creditor, better understand the consequences of delay and try to settle their obligations more promptly.
Moreover, the involvement of a neutral representative helps maintain business relationships — direct pressure from the creditor often harms them. A third-party debt recovery company can simply explain that it is doing its job.
Thus, choosing the right debt administration strategy is a key part of a business’s overall success. Business leaders in Lithuania should pay close attention to debt prevention methods.
We provide the following legal services related to debt prevention:
- evaluation of business partners’ reliability and solvency
- company monitoring
- control of financial payments
- use of preventive stamps
- promissory notes
Evaluation of Business Partners’ Reliability and Solvency
Before signing a contract with a new client, it’s important to assess their solvency, financial potential, and overall situation to avoid future debts. We offer a detailed evaluation of companies of interest, including data on companies registered in the Republic of Lithuania: revenues, comparative analysis, insolvency, bankruptcy, liquidation, number of employees, management, share capital, assets, liabilities, ownership of vehicles and real estate, and more.
Company Monitoring
Monitoring is the continuous observation of a company’s condition, activities, and financial changes. It’s important to evaluate business partners’ solvency not only before the contract is signed but also during its execution — monitoring changes in share capital, workforce, and registration data and responding accordingly in line with the company’s debt management policy.
Financial Payment Control
Financial payment control involves continuous monitoring of a company’s financial transactions, warning clients about overdue payments, and implementing other preventive measures to ensure that late payments do not turn into debts.
This service is intended to manage and supervise all incoming payments for goods and services within accounting systems. It includes: administration and oversight of payments, tracking returned payments, negotiating debts and penalties with clients, managing cash payments, accounting and control of deposits for goods/services, correcting misallocated payments, and more.
In the Republic of Lithuania, such practices help companies identify risks early and maintain financial liquidity.
Use of Preventive Stamps
A preventive stamp acts as a reminder to the buyer to pay invoices on time and serves as a warning to potential debtors that legal action may follow in case of delayed payments.
Using such a stamp increases the likelihood of quicker debt recovery and encourages a disciplined payment culture. The stamp can be used on contracts, invoices, work completion certificates, and other documents — and is particularly effective in business practice in Lithuania.
Promissory Note (Vekselis)
A promissory note is a financial instrument issued in accordance with the law, where the issuer unconditionally commits to paying a specified amount to a designated individual or instructs another party to do so.
It can be a useful tool for quick borrowing or short-term financing.
If the issuer (the debtor) does not pay the specified amount by the due date mentioned in the promissory note, the holder can contact a notary in Lithuania to protest the note. The notary then issues an enforceable document (executory endorsement), which allows the holder to approach a bailiff directly — bypassing court proceedings.
This allows for efficient and expedited debt recovery.
We prepare promissory notes and offer consultation on their issuance and enforcement.