by Katherine Hymer
Firstly, you need to establish your reasons for hiring a debt collector. Do you have debts that are unpaid? Outstanding debts you thought were impossible to recover? Not worth the amount of time and energy you would spend having to chase the debtor? These are some of the reasons that our clients had before handing their debts over to us.
What to do before contacting a debt collector
If you do find that you are in need of a debt collection agency, you should establish the number of accounts you have that require collections, your history with the debtor and any attempts you have made in trying to contact the debtor. Check that you have all supporting documentation e.g., signed authorities, signed delivery dockets or Director’s guarantees, etc.
All of this information will be instrumental when a debt collector deals with your case so as they are not back-tracking work that has already been done. Knowledge is power so give your debt collector all the information you have.
Research and contact
Call a number of debt collectors. This will give you the opportunity to compare services/fees/guarantees to ensure you receive the best rate. Although you should be wary of companies that don’t offer a ‘no win-no fee’ offer.
You can also check out previous blog, How To Evaluate Your Debt Collection Agency.
Before signing any contract, you should be aware of the debt collector’s fees and penalty rates so you don’t pay exorbitant fees for collecting unpaid debts (that seems counter-productive). Most companies will have you sign a written agreement that clearly states their fees and penalties so there is no confusion.
We have constructed a short list of questions that you can use when you contact debt collection agencies you are considering working with.
- How many people will look after my accounts?
- How do you report on the progress and how often?
- Is Commission charged on the debt value or payments received and how much?
- What other charges do I need to be aware of prior to commencing?
- Do you work with a legal team or if a debt needs to be pursued via litigation, do I need to go elsewhere?
- Do you have a signed written agreement that clearly states your fees and penalty rates?
- Do you offer free legal letters of demand and free legal advice?
- Do you have an online software so I can get updates?
- Will I have my own Client Liaison Officer for any enquiries?
Good luck and happy collecting!
ADC Legal Litigation Lawyers is a legal practice specialising in commercial advice and litigation, debt recovery and insurance claims recovery disputes. For more information, email us at firstname.lastname@example.org or call 1300 799 820. Talk to us about your litigation or dispute concerns via Skype at adclegal.