What is the different between a debt recovery service and a debt collection company?
It is frequently believed the two terms debt collection and debt collection are one and the same. They sound alike, don’t they? The English Oxford Dictionary defines ‘recovery”, and “collection,” as:
Recovery = Retrieval and Possession Returning and Redemption.
Collection/Collect = Group, to Assemble, to Fetch and to Accumulate.
Alike, but not quite the same.
A significant portion of debt recovery matters are dealt with by solicitors following the debt collection process has been tried unsuccessfully , but the debt remains due.
Debt collection companies provide inexpensive and quick online service available online.
In our experience, the debt collection agencies typically issue basic 7-day demand letters that give basic information about the amount due. However, as the age old adage is, “you get what you pay for”. If there is no response or no payment be received to the letter of demand for payment it will not be sufficient if had to proceed toward court proceedings because it wouldn’t meet the Court’s pre-action requirements.
Do debt collection companies have the ability to issue your claim or issue an Statutory Demand on the reverse of this 7 day demand? Perhaps but there are serious consequences for doing this. In the first place, a reasonable amount of time (in the mind of the Court) for a debtor’s response can be 14 days (longer for more complex cases). There are certain details that must be contained in the Letter before Action or Letter of Claim and these 7 day demand letters often don’t contain. This could result in consequences such as the Court inflicting costs sanctions or the case may be suspended in the Court (halted for a set period) as the reason for failing to adhere to the correct protocols are investigated.
A crucial aspect to think about is whether a debt collection agency in London can engage in negotiations and communicate with the debtor in the event that there is a dispute over a debt, and help in moving the matter towards a satisfactory conclusion. According to my experience, debt collection agencies do not normally handle disputes.
However, this isn’t to suggest that a letter of collection may not work, however, it could be effective when the situation is simple and the payment is received in return and the case is closed. In the event of no response or payment or if a debt becomes disputeable, the debt collection process has run its course and may result in additional expenses that are incurred prior to the instruction of Solicitors and the formal debt recovery process.
Debt Recovery
If the debt is due within the context of business or between people, the debt recovery process is commenced in line with the objectives set out in the Practice Direction on Pre-Action Procedures and Conduct. If a debt is owed to a business from an sole trader or an individual, the recovery process also must comply with the 2017 Pre-Action protocol for Debt Claims , which was recently put into place in the Ministry of Justice. If a situation has to be taken to Court It is vital that compliance with these procedures can be fully demonstrated. If they’re not, sanctions may be imposed, especially so the cost of litigation. The protocols make sure that the parties exchange enough of information at the outset and indicate a willingness deal with any issue without having to resort to Court procedures.
We understand that every case is completely unique. It is extremely rare that the circumstances regarding the non-payment or non-payment of invoices, and/or the accrual of debts is ever identical. If necessary, we will suggest you instruct us to conduct pre-action screening in respect of the credit worthiness for the person who is in debt.
We take pride in providing efficient, comprehensive and, most importantly, fully legally compliant debt recovery solutions specifically tailored to your particular needs and needs for an efficient, quick and satisfactory result.
We are also able to offer advice regarding the possibilities of debt recovery actions in the event that you have to go with Court action and also take actions to enforce any judgments that you have obtained and provide advice on the most effective method of enforcement in the specific circumstances.
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