How easy would it be for a normal everyday person or small business to go through the processes of collecting their debt? Well, it depends on a number of things, like how much the debt amount is or how long has the debt been owing for example. However the core question is how difficult is it really for people to collect bad debts from people who owe you money?
It is theoretically possible for you to successfully collect debt on your own, although you need to realise that every situation is unique and there’s a lot of complicated steps that you need to follow to achieve a positive end result.
One of the primary reason why people outsource debt collection to professional debt recovery companies is due to they specialise in the collection of debts. Moreover, they have access sophisticated technology and proven processes to make sure you get paid faster, ultimately reducing your collection costs in the long run.
Most reputable debt collection companies will always reduce the possibility and necessity to proceed to court and undertake legal proceedings to get your money – as this can be quite a costly exercise and won’t benefit anyone who is exposed to the whole process. After all, you shouldn’t be stressed about collecting money owed to you for goods or services rendered, so by making sure your debts are collected as soon as possible is the best and most viable options to you. Dont forgget, the longer the debt is owed, the chances of collecting the debt diminishes, not to mention the important of local laws with regards to statute of limitations, of which we go through in more detail in another article.
A debt collector can charge a commission but lawyers because of law society rules can only charge for their time so they can’t charge commissions
There are some debt collection companies which are very closely associated with debt collection lawyers specialist equation lawyers and in some cases the owners of debt collection company might actually be the owner the little firm.
When would you go from working with a debt collection agency?
The roles of the debt collection agency fulfills in the — process that they normally initiate the referral and then they make phone calls to the person who owes the money and request that they pay in those phone calls and then the next step would be that they would put something in writing by sending a payment reminder letter or a letter of demand and then if those written steps fail that’s when the matter would be referred to a lawyer and the legal proceedings would begin
A debt collection agency can click I think they have a debt collection success rate of about 15-20%.
So purely by intimidation?
Yeah the tactics that they use or the fact that the matters been referred to a debt collector often initiates a faster response from the debtor considering the powers they have to record data on their credit file.
A debt collection lawyer because they only charge hourly rates can actually be cheaper than the application agency because they don’t show a declaration agency will normally charge Commission.
And if there is the need to go beyond the initial debt collection process and initiate legal proceedings, then that facility say is all
What amount of money should someone consider using a lawyer over a debt collection agency?
The basic jurisdictions that of the chord simulation two amounts of money now that in New South Wales you have the local court which deals with matters of up to $10,000 you have the district court which deals with matters between $10,000 and $750,000 and then any matter involving in a map over $750,000 is referred to the Supreme Court immediately and then you also have matters of federal jurisdiction which involve bankruptcy or company winding up and they can be for any amount over $2,000 at the moment but that’s seem to be changed to $10,000.
When would the best time to use a lawyer as opposed to debt collection agency for debt recovery?
Generally speaking, a debt collection company is generally more cost effective than using a lawyer for your debt collection process or affairs. Whether you need a debt collectors Perth or debt collection Adelaide finding a reputable debt collection company who knows and abides by the local laws and jurisdiction is vital to your process of successful debt recovery.
So let’s take a closer look. So a debt collection agency won’t charge a commission until they collect a debt, with many working off the no collection, no commission model, however a lawyer would charge at an agreed hourly rate which can become quite expensive.
Is it better to use a lawyer when your debt is about $3000?
So does this mean agencies work with smaller debts?
No, although part of the appeal of declaration agencies for corporate clients is that they package their debt collection processes and infrastructure together for do corporate creditors who have lodged debt portfolios that they need collected.
So, like large institutions like banks or insurance companies or government department, civil, communications companies they will employ debt collection agencies because the debt collection service can be provided to them on a large corporate scale, whereas for the individual it might not be as effective in some circumstances.