If someone owes you money, you may be unsure as to whether you should be engaging a debt recovery lawyer or alternatively a debt collection agency. It is usually dependent on the circumstances, the amount of debt and the required timeframe for resolution.
It is recommended that you talk to both a debt collection agency and debt recovery lawyer, in order to see which is the best option for you. However, some factors which you may wish to consider are:
Debt collection agency
- Debt collection agencies have competitive fees and adopt a "no collection, no commission" model. Meaning that, they will only charge commission only if and when they have successfully collected the debt.
- Have the incentive to collect fast, since they want to be paid their commission;
- They have a high success rate as it is their speciality and have experience in collecting debts; and
- They tend to do a free appraisal of your debt.
Debt recovery lawyer
- Can provide comprehensive and tailored legal advice and recommendations (especially in circumstances if the debt is disputed, as debt collectors are limited in what they can provide);
- Are able to draft a customised letter of demand;
- Can file court documents and represent you in any court proceedings later down the track;
- They can provide you with a realistic and commercial solution, depending on your needs and circumstances of the debt; and
- Have a high success rate as it is their speciality and have experience in collecting debts
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
