Debt Collector Vs Lawyer: Who To Choose For Collecting Unpaid Debts

debt-collectors-vs-lawyer-which-to-choose-for-unpaid-debt

So you have a customer who has an overdue account and is not making an effort to pay.

You have taken a number of steps to recover the funds yourself such as sending a reminder email, making phone calls and sending overdue payment letters.

Yet still you have not received payment or worse you cannot contact the debtor at all.

When this happens you have a few options moving forward…

Hire A Debt Collector

As the name suggests debt collection companies specialise in recovering unpaid debts. Because their entire business is based around this service they have proven systems in place and are very efficient at recovering unpaid debts.

Debt collectors will often employ many of the same techniques you used yourself to initially follow up the debtor such as sending letters of demand and making phone calls.

Though they often have a much better success rate because a) This is what they specialise in, and b) Debtors will take communication from a debt collector much more seriously, because they have the ability to register these unpaid debts against the debtors credit history, along with other more serious courses of action.

Most debt collectors also offer very competitive rates and you should always choose a debt collection agency that offers a “No Recovery, No Charge” service so you only ever pay when they recover the money owed to you. (Most Debt Collectors simply charge a percentage of the amount they recover for you)

You can read more about how debt collectors work “What Can Debt Collectors Do If Customers Don’t Pay”.

Hire A Lawyer

Hiring a lawyer who specialises in debt recovery is often a wise choice in certain cases. But this is only recommended if you fully intend to take the debtor to court if they do not respond to your lawyer’s initial efforts to recover the funds. So you generally wouldn’t hire a lawyer to recover a small debt.

The other benefit of hiring a specialist lawyer to collect your debts is that the letters they send will be written on legal stationary and the recipient will take their threats of legal action much more seriously.

Generally businesses will only hire a lawyer to recover higher amounts of debt because their fees can quickly add up and many do not offer a “No Recovery, No Fee” service.

Write The Debt Off

If the debt is only a very small amount and you feel it is not worth the time or hassle then you have the option to simply write it off. But you must be very careful here.

You don’t want other customers and people in your industry to think that you will allow people to get away with not paying your invoices. Especially because the debt collector fees are so small and you only pay a small percentage fee out of the funds they are able to recover for you.

So unless it is a very small debt then I would go for option 1 or 2 first.

So How Do You Choose Between A Debt Collector And Lawyer

Well the great news is you don’t have to.

You can now have the best of both worlds by hiring a debt collection agency that has in-house lawyers who specialise in debt recovery.

Not only do you get the benefit of a dedicated debt collection company that offers…

  • Low fees
  • No recovery, no fee service
  • A proven track record, and
  • An easy set-up process

But you also have access to lawyers who specialise in debt recovery who can…

  • Send letter of demand on legal stationary
  • Provide sound legal advice
  • File court documents, and
  • Represent you should you need to take the debtor to court

At JMA Credit Control our debt collectors and in-house solicitors will exhaust every option before taking legal action, but if the needs arises you know you have a specialised legal team to represent you in court.

This can save you a great deal of time and money because once you register your debt with JMA Credit Control you no longer need to worry about the debt, or choose between a lawyer or a collection agency.

If you’d like to discuss a current outstanding debt with one of our debt collection specialist please call or complete the contact form on the left.

Written by Richard Thompson

Richard Thompson is the Managing Director and owner of JMA Credit Control and has over 25 years’ of trusted experience. Richard has a wealth of knowledge in Credit Management and Debt Recovery ensuring client’s recovery bad debt quickly and cost effectively.

2 Responses to Debt Collector Vs Lawyer: Who To Choose For Collecting Unpaid Debts

  1. nell.wright54@gmail.com' nell wright says:

    Please call me on 0421644573 I have some questions to ask
    Thanks
    nell

  2. teacherk6@hotmail.com' Jason Barone says:

    Separated 20 months, wife hasn’t contributed a cent towards mortgage in both names $782k.

    She is dragging my court application out to bleed me dry financially while the property increases in value.

    Want her to start paying her share and pay back what she hasn’t.

    Are your services able to help?

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