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How a Debt Collection Service Can Benefit Your Business

If you’re a business owner who has debts owing to you then you’re likely to feel annoyed and frustrated.  Smaller businesses in particular rely on a steady cash flow in order to carry on trading.  Being owed money, especially if it’s a large sum, puts your business and your livelihood at risk.  This means that hiring a debt recovery service to recover the money owed to you is likely to be a good investment – especially if you find a debt collection agency that operates on a no win, no fee policy.  Let’s take a look at what a debt collection agency can and cannot do on behalf of your business.

A DEBT COLLECTION AGENCY CANNOT:

Force a debtor (whether an individual or a company) to pay up 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).  However, your debt collection service can ensure that the debtor is not simply using this as a delaying tactic.  IN cases where a business continues to generate revenue despite notices of ceased trading, your debt collection agency can attempt to find out if there is any money to offset against the total debt owed to your business.

A debt collection provider can attempt to negotiate a settlement if the debt is disputed – you will need to prove details of all previous correspondence and conversations between both parties.  Your debt collection service cannot force payment of the debt but will be able to advise you on the options of mediation and legal action and which is the best way forward for you.

A debt collection service cannot pursue debts that are mover than six years old if there’s been no contact between you and the customer during the intervening years and if the debtor has not admitted to the debt.  However, if there has been continued contact during that time regarding the invoice and the debtor has either communicated with you or made a partial payment, the debt can be pursued indefinitely.

Debt collectors cannot give legal advice – that’s what solicitors are for.  However, debt collection companies often work closely with solicitors and can offer a litigation service if necessary.

A DEBT COLLECTION AGENCY CAN:

Take action to trace a missing contact – you’ll have to provide as much information as you can such as previous contact details, correspondence, failed payments, etc. to make it easier for them to trace the debtor.

A debt collection service can offer you the benefits of their experience and expertise.  They know the best ways of communicating with debtors for the most likely chance of a settlement. 

In cases of genuine hardship, a debt collection service can work closely with the debtor to work out a mutually agreeable instalment arrangement and make sure that this is adhered to.

A debt collection service can save your business time and money – chasing debts is a complicated and time consuming task.  Outsourcing this work to a debt collection service will leave you free to manage your business.  If you choose a debt collection company that operates on a no win, no fee basis, then you’ll only need to pay if the debt is successfully recovered.