Debt Collectors vs Lawyers: Who to choose for debt recovery
Most businesses experience debt collection issues with customers, however if you believe you have exhausted all avenues in retrieving the bad debt and still aren’t making any progress, it’s most likely the right time to take the next step in recovering your debt.
Before taking this next step in the debt collection process, and depending on the current situation, you should make sure that you have at least addressed the following;
- Reminder invoices have been sent
- Follow up emails have been received
- Phone call with customer outlining outstanding debt is overdue
With all internal debt recovery methods exhausted, there’s a few options that are available for you to pursue.
Hiring a Debt Collection Agency
Most obvious, debt collection companies specialise in recovering bad debt. Although often wrongly stereotyped, the majority of debt collection agencies offer a very professional service.
Collection agencies are the most obvious choice for businesses looking for third-party assistance in collecting unpaid debt, as they possess the knowledge and years of experience offering such services. This, along with their own specialised systems, software, methodologies and training regularly makes them more cost-effective and efficient at debt recovery on troublesome accounts.
Debt Collectors – Although debt collection professionals often deploy much of the same collection procedures businesses would use themselves prior to handing over an account, they generally have a much higher collection rate due to a number of reasons;
- Access to specialised & proven collection infrastructures
- Often taken more seriously
- Ability to register unpaid debts against the debtor’s credit file
- Capacity to take a more serious course of action
Debt collection agencies can come in all sizes – some purely focus on localisation, whilst others specialise in certain industries and sectors or on a national level. With this, prices do obviously vary between agencies, however most generally offer quite competitive pricing or a ‘No Collection, No Commission” model so you will only pay when the debt collection agency recovers the amount owing to you.
Hiring a Lawyer
Engaging a lawyer who specialises in debt collection is a sensible decision, as they can advise you whether it makes sense to pursue the matter through the civil court or via a debt collection agency.
Businesses often choose the services of a debt recovery agency over a lawyer because of the costs and the negative image that is associated with taking legal action. Depending on the current situation, more often than not the cost of hiring a specialised debt collection lawyer is significant, so it’s generally only recommended that you hire a lawyer if you intend to take the debtor to court.
Generally, companies will only hire a debt collection lawyer to recover large amounts of debt due to their associated fees, as they don’t offer a “No Collection, No Commission” service.
Similar to using debt collection agencies, sending professional correspondence from a practising lawyer using legal stationary is always a great strategy to try and influence your debtor to pay up quickly.
Debt collector vs Lawyer: Choosing the right Professional
Deciding on whether you should engage a debt collection lawyer or hire a debt collection agency really depends on your unique situation, however the decision is generally driven by the amount of debt you need recovered.
We would highly recommend you approach both professionals to get some obligation free advice. Alternatively, you could speak to us today as you’ll not only have the benefit of hiring Australia’s leading debt collection agency, but have direct access to Marshall Freeman’s team of lawyers who specialise in debt recovery.
You’ll have direct access to a dedicated recovery specialist, offering;
- Competitive Fees
- “No Collection, No Commission” model
- High Success Rate
- 24×7 Online Service
- FREE Appraisal of your Debt
Whilst at the same time enjoy the following benefits of using one of our specialised team of debt collection lawyers.
- Providing comprehensive legal recommendations
- Facilitate letter of demand
- File court documents on your behalf
- Legal representation for any court proceedings
Our dedicated and professional team of debt collectors and lawyers at Marshall Freeman will make sure all recovery options have been addressed prior to taking any legal action, however if it’s required to go down this route you’ll have Australia’s leading debt collection specialists representing you.