If you are a business owner who is struggling to recover outstanding debts from your customers, you may be considering hiring professional debt recovery assistance. Two common options for commercial debt recovery are debt recovery lawyers and debt collection agencies. In this blog, we will explore the key differences between these two options, with a focus on professional collections services and debt collectors Melbourne, Sydney, Brisbane and Perth.
Debt Recovery Lawyers:
Debt recovery lawyers are legal professionals who specialize in recovering debts on behalf of their clients. They typically have extensive knowledge of debt collection laws and regulations and can provide legal advice and representation to businesses seeking to recover outstanding debts. Debt recovery lawyers can help businesses with the following:
Legal Action: Debt recovery lawyers can initiate legal action against debtors who refuse to pay their debts, including filing lawsuits and obtaining judgments.
Negotiation: Debt recovery lawyers can negotiate with debtors to reach a settlement agreement, which can often be more beneficial to both parties than going to court.
Enforcement: Debt recovery lawyers can take legal action to enforce judgments against debtors, including garnishing wages, seizing assets, and placing liens on property.
Fees: Most debt recovery lawyers charge their fees based on an hourly rate, and you may have to pay upfront before starting any action. So, you always need to assess the cost-benefit ratio before instructing lawyers to handle a debt. Generally speaking, debt amounts under $50k are unlikely to be worth starting this way.
Debt Collection Agencies:
Debt collection agencies are companies that specialize in collecting debts on behalf of their clients. They typically have a team of experienced debt collectors who use a variety of methods to recover debts, including phone calls, letters, and personal visits to debtors. Debt collection agencies can help businesses with the following:
Debt Collection: Debt collection agencies can use their expertise and resources to track down debtors and collect outstanding debts.
Professional Collections Services: Debt collection agencies can provide professional collections services, including credit reporting, skip tracing, and receivable management.
Speed: Debt collection agencies can often recover debts more quickly than debt recovery lawyers, which can be beneficial for businesses that need to recover outstanding debts quickly.
Fees: most debt collection agencies charge on a commission basis, some of which may have membership fees or annual fees. No matter how they charge, your upfront investment in chasing a debt is almost certain to be less than lawyers costs.
Due to the fee structure of debt collection agency, debt collectors generally have more incentives to chase down your money.
In conclusion, if you are a business owner seeking to recover outstanding debts, you have two main options: debt recovery lawyers or debt collection agencies. Debt recovery lawyers can provide legal advice and representation, while debt collection agencies can use their expertise and resources to recover debts quickly, efficiently with a lower risk of cost. Ultimately, the decision between these two options will depend on your specific circumstances and needs. If you are located in Melbourne, Sydney, Brisbane or Perth, be sure to consider Xservice Debt Collection, which has extensive experience with commercial debt recovery. Contact us today for a free consultation.