What a debt collection agency can’t do for your business…

A debt collecting agency can’t force a debtor Company to pay if they are in liquidation, or receivership, or in the case of an individual if they are bankrupt or subject to a Debt Relief Order.  What they can do is make sure that what the debtor says is really the case and not simply a delay tactic. There are cases where a business continues to generate revenue despite notifications of ceased trading and it is part of the debt collectors remit to find this out for you. In this situation, your recovery agency can attempt to establish if there is any money to offset against the total debt owed to your business.

Debt recovery agents can try to negotiate a settlement if your debt is disputed but you must provide details of all previous correspondence and conversations between the parties at the outset. If the invoice remains in unresolved dispute then your debt collection agency cannot force them to pay. There is however the option of mediation or legal action, which must always be weighed up and considered carefully to avoid the risk of throwing good money after bad. Your debt collection agency should be able to advise you on the best path to take.

A debt collector can't pursue debts older than six years if no contact has been made in that time and if the debtor has not admitted to owing the money.  However, under the 1980 Limitation Act, if there has been continued contact regarding the invoice and the debtor has either made a part payment or communicated with your business, the collection agent can pursue the debt indefinitely.

Debt collectors are not solicitors and cannot give legal advice. However many debt collectors work closely with their own solicitors and offer a litigation service if the normal debt collection procedures have been unsuccessful.

What debt collection agencies can do for your business…

Debt recovery agencies can take action to trace a missing contact in the case of gone aways.  They will need as much information from you to conduct the search such as previous contact details, correspondence, bounced cheques, etc. and then they will look for those debtors through every means possible.

Nationwide debt recovery agencies can give you the benefit of their expertise and countrywide resource.  They know how to communicate with debtors for the greatest chance of settlement.  In genuine case of hardship they will work closely with the debtor to ensure a mutually agreeable instalment arrangement and ensure it is adhered to. In short they know what works.

Most importantly of all, debt collectors can save you time and money. Chasing debts is a very time consuming task.  It takes persistence and patience to establish contact and move that debtor down the path to payment.  By outsourcing the work to debt collectors, your business can be focusing on more productive activities that would have otherwise been spent on the phone (often to the wrong people), writing letters and sending emails.  And, because most debt recovery agencies work on commission, you only pay when they succeed in getting your invoices paid.

We hope this article has clarified a few points about debt collection agencies.  If you would like to know more, please contact our friendly team at P&J.