Advantages of Using a Debt Collection Agency Versus a Solicitor

For businesses with unpaid invoices, sometimes seeking external professional help is the best solution to receiving your money. Making a decision around whether to use a Debt Collection Agent or a solicitor might be tricky if you haven’t encountered this scenario before. Each have their own advantages depending on the specific circumstances and requirements of the debt recovery process.

What Is the Difference Between a Debt Collection Agent and Solicitor?

For the most part, debt collection agents are able to handle the entire debt collection process, whereas you might find that solicitors are typically only willing to get involved during the litigation process. However, here are some advantages of using a Debt Collection Agent over a solicitor that you should be aware of:

Specialisation

Debt Collection Agents specialise in recovering debts and have extensive experience in handling such cases. They are well-versed in debt recovery strategies and tactics, making them more efficient and effective in dealing with debtors.

Cost-effectiveness

Debt Collection Agents typically charge a percentage of the amount collected, known as a contingency fee. This means that you only pay them when they successfully recover the debt, which can be more cost-effective compared to solicitors who often charge hourly or fixed fees.

Resources and Tools

Debt Collection Agencies often have access to advanced tools, databases, and resources that can aid in locating debtors and assessing their ability to pay. This can enhance the chances of successful debt recovery.

Focus on Volume

Debt Collection Agents often handle a large number of cases simultaneously, which can be beneficial for businesses or individuals dealing with multiple outstanding debts. They have the capacity to manage a high volume of cases efficiently.

Amicable Resolutions

Debt Collection Agents may have more experience in negotiating with debtors and finding amicable solutions. This could result in a quicker resolution and may help preserve relationships between the creditor and the debtor.

Compliance and Regulations

Debt Collection Agencies are familiar with debt collection laws and regulations, ensuring that the debt recovery process is conducted in a legal and compliant manner. This reduces the risk of potential legal issues for the creditor.

Time-Saving

Engaging a Debt Collection Agent can save time for creditors who may not have the expertise or resources to pursue debtors on their own. The agent can handle the entire debt recovery process, allowing the creditor to focus on their core business activities.

Things to Consider

Despite the advantages, it's essential to choose a reputable and trustworthy Debt Collection Agent. Some agencies may employ aggressive or unethical tactics, which could harm the reputation of the creditor or even lead to legal trouble. Therefore, it is crucial to conduct thorough research and due diligence before hiring a Debt Collection Agent or a solicitor. In some cases, depending on the complexity of the debt and what is involved.