Debts are inevitable in many businesses, and debt collection is by no means a pleasant process. The more deals a company makes, the bigger its debt burden is likely to be. So, what is important to know about debt collection and what are the 5 questions most often asked by companies with debtors?
1. Is it worth trying to collect the debt yourself?
Of course, first of all, it is always worth trying to collect the debt on your own : perhaps the debtor will be in a peaceful mood and will negotiate favorable conditions for both parties.
If the case is more complex, then it is worth considering how much knowledge, experience and ability you have in the debt collection process. When collecting debts, not only legal nuances are important, but also negotiation, analytical and other abilities.
There are also cases where, due to lack of knowledge, we lose a lot of time and incur unreasonable costs . So, very often, when you see that the case will not be easy, it is worth immediately contacting a debt collection company, and doing the direct work yourself.
2. What is the role of debt collection companies?
A company that provides a debt collection service first thoroughly analyzes the situation and acts as an intermediary between the debtor and the company to which he owes money. Another function of a debt collection agency is to review all documents and prepare a claim.
Debt collection lawyers completely take over communication with the debtor , so customers who have ordered the service do not need to waste their time communicating with the debtor.
Another important aspect is that various alternatives are offered to the borrower, compromises are sought, settlement agreements are attempted, etc. Thus, a team with a lot of experience in debt collection takes all steps to recover the debt as quickly as possible.
3. How long does debt collection take on average?
It is difficult to answer exactly how long debt collection takes. It is important to know that there are two possible stages of debt collection – pre-trial and judicial . During the pre-trial process, all attempts are made to recover the debt by finding compromises. If pre-trial debt collection does not bear fruit, then judicial debt collection is started.
So, how long debt collection will take depends on various circumstances : whether the debtor admits that he is in debt and is inclined to negotiate the terms of debt repayment and generally responds to calls and messages.
However, when the debtor hides (this happens more often if debt collection is carried out from a natural person), does not cooperate, artificially delays the process, everything can be prolonged. Also, in a typical case, debt collection is implemented faster in Lithuania than abroad.
4. How much does debt collection cost and who pays for it?
The customer who ordered this service pays for debt collection. However, people often have the misconception that debt collection is expensive and not even worth starting the process.
Cooperation with companies that apply transparent pricing will help to insure against this. For example, some debt collection companies have indicated that the price of the service may vary depending on various circumstances. Thus, the client does not know whether it is worth choosing such a service in general, whether it will pay off financially and whether the debt collection costs will not exceed the amount of the debt itself.
Therefore, a more rational solution is to choose companies that apply accurate pricing, such as "Linden": the website has a calculator where, after entering the amount of the debt, it immediately shows what the price will be charged for the preparation of documents, submission to the court and administration of the case in court until the decision is made .
5. How to collect the debt faster and more efficiently?
If it was not possible to reach an agreement with the debtor, then it is best to contact a legal services company that specializes in debt collection. You will not have to prepare documents, go to court, so you will save a lot of time. By the way, all formalities with debt collection companies can be handled remotely, so this will also guarantee greater smoothness and efficiency.
