Debt collectors are often called upon when a company has followed and exhausted its usual procedures for collecting an unpaid debt. A debt collection service will not succeed in collecting every debt, but is likely to have a better success rate overall.
The usual procedure of a debt recovery service is to write letters and make telephone calls, following an office-based process. In some circumstances, a visit will be made to the debtor, but notice must be given under guidelines issued by the Office of Fair Trading. If notice is not given, the debtor has no obligation to discuss the debt at that time and a meeting at a later date should be arranged if the debtor wishes. Debt collectors have no power to enter a property or seize goods.
A debt collection service can be a good option for a debtor who is delaying or trying to avoid a payment. For cases where the debt is harder to recover, there is the option of a County Court Judgement (CCJ). A debt collection service can sometimes help with this process, particularly if a service is chosen that uses debt collection solicitors. It therefore might be worth employing the services of a debt collection agency first, who can then help pursue the debt as far as is necessary.
If the debt is large and there are realistic concerns that it is not going to be paid, there is the option to apply straight to the courts for a judgement. A firm of debt collection solicitors can usually provide advice on the best option to take and the alternative legal procedures that are available.
Fees for a debt collection service are normally charged per letter or telephone call, as well as a percentage of the debt that is recovered. Reasonable costs can usually be added to the debt if it has to be pursued through the courts.
For more information, free initial advice or a general discussion, please contact AR Legal Collections on +44 (0)20 8202 0730.