Hiring a professional debt collector will save you the trouble of chasing debtors on your own, and at the same time increase the likelihood of recovery. Whether you have one outstanding debt or many, the skills and expertise of a licenced debt collection agency will save you time and money.
With all the benefits a debt collection agency offers, you may be wondering, how much does a debt collector cost?
The cost of hiring a collection agency will vary depending upon the circumstances of your debt. These include the size and nature of the debt, the age of the debt, and whether or not a dispute exists.
Your debt collector will assess the unique circumstances of your case and provide you with a strategy to collect your debt as well as the costs and timeframes to resolve the matter. This quote should be free of charge, so you can make an informed decision before agreeing to their services.
Most debt collectors charge a commission for their services. The commission will make up a small percentage of the amount of debt they manage to successfully recover.
Luckily, most agencies operate on a ‘no win, no fee’ basis. Therefore, you only pay a commission AFTER the debt has been partially or fully recovered.
If you wish to proceed with legal action, there are additional costs involved in providing this service.
Your debt collector will provide you with an estimate of these costs prior to proceeding with legal action. You’ll also receive an estimated timeline and steps involved in the process. Once you understand the steps, costs and likely timeframes you will be able to make an informed decision as to whether or not you should proceed with legal action.
Importantly, legal proceedings should only be commenced with your prior approval.
To legally recover all your debt collection cost and fees, you and the debtor must have a written and signed agreement for this to occur. This clause, called a ‘Cost Recovery Clause’, is contained in your terms and conditions of trade, and is designed to allow you to pass on the collection agency’s costs to your debtor. In Australia, debt recovery costs (commission) can be added to the debt in most states and territories, but check with your debt collector first to ensure you can legally recover these costs.
At AMPAC Debt Recovery, we offer you an obligation-free review of your credit documentation. And we’ll advise you on whether you can recover these costs or not.
If your case is successful and you obtain a court judgement against the debtor, then you can generally recover most of your legal fees.
However, keep in mind, if you take legal action against your debtor and lose the case, you may be ordered by the court to pay a portion of the defendant’s costs.
Your debt collection agency can explain the process, costs and risks associated with taking legal action so as you can move forward with confidence. In certain cases, your collection agency may advise against commencing legal action, if they feel the likelihood of success is low.
Call AMPAC Debt Recovery on 1300 426 722 or send your online enquiry to find out how we can save you from the burden of unpaid debt.
Do you have debt that needs recovering? Are you unsure on where to start? Contact AMPAC Debt Recovery for solutions today and speak to one of our qualified consultants to get you started.