When to Hire a Debt Collector

Are you unsure of when to hire a debt collector?

There are many ways that debt collectors can help you, and this will vary depending on the debt collection agency you contact.

Some debt collectors have vast experience, and work with consultants in other fields to further increase the likelihood of recovery your debt.

For example, at Advance Debt Collection, we have a partnership with a litigation law firm, who are experts in legal debt recovery.

We advise clients of their options with regard to legal action when we have exhausted all existing debt recovery options.

If the client decides that the amount owed to them is worth the expense of legal fees, our expert debt collectors then work with our legal firm partner to ensure there is a smooth transition, making sure all relevant details are known to the solicitors acting.

When to Hire a Debt Collectors

It is important that if you decide your own in house staff, or your current debt collectors are unable to secure recovery of the debt, that you hire a debt collection agency, or Solicitor, with the relevant experience and expertise.

Whether you hire Advance Debt Collection and work with the law firm we have partnered with, or you hire another organisation/s entirely, it is paramount to ensure you hire debt recovery solicitors with relevant experience, and only after you have first engaged an appropriately qualified debt collection agency.

These following points may help you in determining that it is time to hire a debt collection agency, and hopefully they ultimately lead to your debt being recovered. 

Poorly Recorded Attempts of Collection

When to Hire a Debt Collector #1 - when you have had a poor record of recovering the debts.

If you are a boutique analogue clock designer, then there is a real chance that you do not have the time, experience, knowledge, or interest to implement industry standard debt recovery methods.

This can also be said of a variety of people in different professions, who spend the majority of their time focusing on providing the service or creating the goods.

When looking to recover debt, it is important to use a variety of methods to record the measures that have been taken to recover the debt.

In some cases, this can be quite time consuming, and require the use of software that some people may not even be familiar with.

This process of documenting attempted recoveries is important not just for the process of exhausting every potential method of recovery in an attempt to get paid, but also, it is paramount for any legal action you may need to talk in the future.

When taking legal action to recover a debt, it is important to make it clear to the court that you have made efforts to recover the debt prior to launching legal action.

Unsuccessful Debt Collection Attempts

When to Hire a Debt Collector #2 - when you have had a number of unsuccessful attempts of collecting the debts.

This is quite obvious on one hand, but businesses, especially small businesses, more often than not are short on time, and as a result, between attempting to recover the debt, and providing your goods and services, there may be little to no time to actually reflect on why your debt recovery attempt failed.

Likewise, there may be little time to attempt to find a new method to recover the debt.

Lack of Experience and Skills in Recovering Debts

When to Hire a Debt Collector #3 - when you lack the skills to collect the debts yourself.

Another somewhat obvious point, a lack of experience in collecting debts is a real sign that you may need to hire a debt collection agency.

The time you spend learning how to collect debts may amount to losing an amount of business that actually exceeds your debt.

Again, this is highly dependent on your personal circumstances.

At Advance Debt Collection we generally work on a no collection no fee basis, so besides a small portion of your time which is spent on briefing us, there is little loss of your own time.

When Considering Bad Debts as Tax deductions

When to Hire a Debt Collector #4 - when bad debts may be tax deductions.

Before relegating a bad debt as a tax deduction, or even simply before pursuing this avenue, it could be worthwhile speaking to a registered debt collection agent or your accountant.

While debt collection agents can't necessarily provide tax advice, upon the unsuccessful recovery of a debt, deciding to talk to an accountant and receiving advice around this may be useful.

Debt collection agents may be able to recommend to you what stage in the process of debt collecting it may be worthwhile seeking tax advise from a suitably qualified accountant and at what time this is a good idea.

At Advance Debt Collection most files are run on a no collection no commission basis, and so at least first attempting to recover the debt may be worthwhile.

Unsure of the Law Surrounding how to Recover a Debt

When to Hire a Debt Collector #5 - when you are unsure of debt collection laws.

It can be hard to know with certainty what is legal and illegal in today's digital age.

Even before the digital revolution, being well versed in the law and understanding what you can and can't do is difficult, especially for those of us who are not lawyers.

While in some cases it is a good idea for you as a business owner to pursue the recovery of your debt yourself, the moment you start to question whether what you're doing is harassment or if it feels wrong in another way, it may be time to hire a lawyer who is well versed in debt collection.

At Advance Debt Collection we have a strong working partnership with debt recovery lawyers with experience in legal debt recovery.

For example, the debt collection is further complicated by the fact that there are limitations around the following

1. Telephone contact and how often you can ring;
2. Times you can attempt to make face to face contact; and
3. Contact attempts at the debtors workplace

Unsure of why the Debt Arose in the First Place

When to Hire a Debt Collector #6 - when you are unsure why the debt arose.

When you are left with a debt and are unsure of how to avoid it in the future, it may be time for you to seek advice from either an accountant, a credit management firm, or a debt collector that offers receivables management services.

One reason for hiring an external agency to assist with credit management and receivables more broadly, is that years of expertise with these matters might allow your consultants to advise on what a credit score of a potential customer may actually mean for you.

When you are Agreeing to provide the Service or Goods

When to Hire a Debt Collector #7 - when you start selling or providing goods and services.

It may sound premature to high a debt collection agency before payment has even become due, however there are plenty of good reasons as to why this could be beneficial to your business.

One reason is that some debt collection agencies can help you receive payment on time without the involvement of debt collection agent and debtor interactions in the first place.

This may take the form of having your terms and conditions looked at by a debt collection agency, or even by engaging the debt collection agency to manage the whole receivables process in the first instance.

While this won’t necessarily lead to you saving money, it might, and further, there is a chance that may also lead to being paid on time, if the purchaser has a clear idea of the terms and conditions upon which you expect to be paid.

Do you need to know when to hire a debt collector to collect your debts?