Debt collection issues can be incredibly frustrating and, in many cases, retrieving the funds you’re owed can feel like an uphill battle.
It’s not uncommon to spend extensive time exhausting all reasonable avenues to recover debt and, regardless of this, to feel as though you’re making little to no progress. This not only takes invaluable time away from your other commitments; business or otherwise, but also leaves you at a loss financially.
Recovering Debt: Your First Steps
When it comes to debt recovery, first and foremost, you need to ensure you’ve taken the appropriate action to recover what you’re owed. While it may be tempting to outsource legal assistance or the like straight away, prior to doing so, check that you’ve done the following:
- Sent reminder invoices to the debtor;
- Confirmed that follow up emails have been received;
- Called the customer to discuss and detail their outstanding debt.
If you’re still struggling to gain momentum, with debtors refusing to cooperate and make payments, it’s likely time to start exploring your next steps and options.
Debt Recovery Options
Typically, those in your situation will go one of three ways; however, it can be difficult to decide which approach is right for you, especially if it’s your first time in this position. By understanding your options and how they differ, you can make an informed choice that suits your needs, getting you one step closer to resolving the issue.
1. Waive the Debt
While this option is far from ideal, if the debt isn’t significant in nature, it can sometimes be in the best interest of the business to move forward, rather than take on the task of chasing down what they’re owed. Generally speaking, such route is avoided unless the debt owed is relatively small and; thus, the hassle and/or cost of following it up is greater than the expected return.
However, if your debtor does owe a substantial amount or, for another reason your business sees fit, you have decided to seek additional assistance from a third-party, you will need to determine which option; a debt recovery agency or debt recovery lawyer, is best suited to your needs and circumstances.
2. Hiring a Debt Recovery Agency
When seeking out third-party assistance for debt collection issues, you may consider hiring a debt recovery agency.
An agency takes the burden out of making ongoing efforts to obtain payment from the debtor but, unlike a lawyer, they don’t have the authority to quickly escalate your matter by applying notable legal pressure. Thus, businesses will usually engage with a debt recovery agency if the debt they’re seeking to recover isn’t sufficient enough to warrant legal action and/or isn’t required urgently.
The service of a debt recovery agency is typically restricted to efforts such as contacting the debtor through phone calls, letters, emails, private messages on social media in a bid to gain their cooperation. This is often paid for on a commission basis, with the overall cost depending on the amount of debt that’s successfully retrieved.
3. Engaging a Debt Recovery Lawyer
Alternatively, you have the option to gain professional assistance from a debt recovery lawyer, who has the ability to commence and enforce legal action.
Debt recovery lawyers are experts in dispute resolution and; thus, can proactively and strategically work to reconcile your debt collection issue by helping the involved parties reach a suitable agreement. Often, a debt recovery lawyer will start by sending the debtor a letter of demand and, if the individual or business still fails to pay, they may advise you to pursue the matter in court.
While agencies are notoriously determined and can appear threatening, they don’t have the authority to take the case to court which may ultimately result in double handling when the case is transferred to a lawyer. With this in mind, if your matter involves large debts, disputed debts and/or serial debtors, you’ll likely benefit far more from having a debt recovery lawyer on your team than you would an agency.
With extensive training and experience in debt recovery, lawyers provide a reliable, professional service, so you can reach a resolution and retrieve what you’re owed.
Which Route: Debt Recovery Lawyer or Debt Recovery Agency?
If you’re set on getting reimbursed, before pursuing your debtor further, you’ll need to first determine which third-party service best suited to your needs; debt recovery lawyer or debt recovery agency.
Debt recovery lawyers can do everything a debt recovery agency can and more, in that they can commence and enforce legal action. Thus, a debt recovery solicitor is often preferable. If Court proceedings are commenced, you can claim your legal costs and interest in addition to the debt owing.
Beyond this, with a debt recovery lawyer on your team, you can benefit from their legal expertise, knowledge and experience in the area. This means that, as you pursue action, you can rest assured you’ll be well informed of your rights and the like every step of the way – providing invaluable peace of mind.
After weighing up your options and making a decision, it’s best to act promptly, following through with your chosen approach as soon as possible.
The longer you wait to take action against a debtor, the more difficult it may become to get what you’re owed. This is largely because, in many cases, you aren’t the only debtor requesting payment, BTCollect will endeavour to make your payment priority.
Get Started With our Debt Recovery Lawyers
If despite your best efforts a debtor has still failed to pay, get in touch with our experienced team of debt recovery lawyers. We can help ensure you remain informed every step of the way, providing you with expert guidance, advice and support.
Ready to start taking productive steps towards resolving your debt collections issues? We can help you do just that – contact our litigators to discuss your options.