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Debt Collection FAQs
Frequently asked questions
Hopefully, most of your questions will have been answered
in the buying guide, but if not, here are a few more common
questions that are often asked about debt collection services:
Should I chose a debt collection agency or a solicitor?
Going to court is the last resort. It depends on the situation.
Generally speaking, collection agencies get paid when you
receive money; solicitors get paid by the hour.
What does it cost?
Rule of thumb: calculate with a 4% to 8% fee for the recovered
debt (note: it can be more, it can be less…). Foreign debt
collections are 2 to 3 times as much. If the collection agency
fails to collect you should not have to pay anything, except
where a placement fee is applicable.
How high is the chance my bad debts will be paid by using
a collection agency?
Impossible to answer. It depends on the quality of your
outstanding debts. Generally speaking, involving a third party
increases your chances for collection. Make sure you only
have to pay after successful collection.
How quickly will I receive the money?
Ranges from within one day to a few weeks. Going to court
is generally the only option if the debt is not collected
between 6 to 8 weeks. You receive your money less fees immediately
after collection of the debt by the collection agency.
What is credit insurance, or trade indemnity?
Insurance in case your customer fails to pay the invoice.
You receive payments for your bad debts up to pre-determined
limits.
What information is needed to collect an individual invoice?
Full name and address, telephone and fax numbers of the debtor,
amount outstanding, copies of invoices, statements, relevant
correspondence, collection attempt history (many agencies
allow you to submit this information online).
How are invoices usually collected?
A combination of letters, faxes and telephone calls, the latter
being the most effective.
What is factoring?
A service providing you cash upon issuing invoices and sales
ledger and collection services. A more complete explanation
of factoring is contained under Factoring on this web site.
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