What Can Debt Collectors Do If Customers Don’t Pay

Most the time the customers and clients you deal with will pay with no problem at all.

But without a doubt there will be times in your business when you provide a product or service and your customer simply can’t or won’t pay (even after a friendly reminder), and further action is needed to recover the money owed.

This is when it can be much easier and cost effective to approach a professional debt collection agency to recover the funds on your behalf.

After all you have a business to run and chasing up bad debts is not what you want to be doing with your time.

But What Can  Debt Collector Actually Do?

Experienced, ethical and effective debt collection agencies have a range of tools and techniques at their disposal to recover your money.

Initial Recovery Approach

When you register your debt with a collection agency, they will generally start their process by sending a “Final Notice Letter” on their company letterhead (You will want to send at least 1-2 friendly reminder letters/emails before this “final notice”).

If this is not successful then a formal “Letter Of Demand”, written by a solicitor is sent. Most debtors will pay in full after these first two steps, especially when the solicitors Letter Of Demand is sent on the legal firms letterhead.

***Note: You will want to be sure that the solicitors Letter Of Demand is included in your recovery fees, otherwise these can be very expensive. See our recent post How Much Does Debt Collection Actually Cost?, for a full list of pricing options and what services are included.

If these measures do not work, phone attempts will be made to contact and arrange immediate payment as a last resort to recover the full amount without legal action.

If it gets to the point where it is clear the debtor is not going to pay the full amount immediately, you the have two options.

  1. Negotiate a payment plan or other arrangement
  2. Start legal proceedings

Negotiating A Payment Plan

Sometimes you may a have a very good client who is currently struggling with cash flow. If you don’t want to lose this client and believe they will be able to get their finances back on track in the near future you can offer a payment agreement.

This could be…

  1. Putting a formal repayment agreement in place that acknowledges the debt, and setup regular repayments until the debt is paid in full
  2. Taking security in exchange for time extending the time to pay
  3. Agreeing to a discount in return for immediate payment

If you don’t believe the client will ever pay then legal proceedings can be undertaken as a last resort.

Start Legal Proceedings

A quality debt collection team will have the solicitors and other experienced team members to advise and implement legal proceedings to recover your funds.

The next steps they can help you with are…

  1. Listing a default on their credit history if its is a company or business
  2. Filing the required legal documents with the courts on your behalf
  3. Representing you in court

So as you can see there are a lot of steps that can be taken to recover an outstanding account.

JMA Credit Control always follow industry best practices and have the people and experience to recover any outstanding debt quickly and effectively.

We also endeavour to exhaust every possible option before undertaking legal proceedings.

If you have an outstanding debt you would like recovered or would just like to ask a few questions, please contact us here.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.