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6 debt collection myths

25/10/2022

We all know that debt collection is one of the most stressful parts of running a business. Yet some companies are still reluctant to use a debt collection agency. The reason? The many preconceives ideas conveyed by press articles and the Internet give them a negative image.

They are thought to be hard, cold, agressive and not very empathetic. Many business owners are convinced that their customers will be harassed by a debt collection agency, that it will damage their business relationships or cause legal issues.And, for the debtor, it can be frustrating if he think a debt isn’t owed or that he's being treated unfairly.

Let's analyze together 6 myths about debt collection :

 

 

 

 

1. Debt collection agencies would be rude and aggressive

This is one of the most common debt collection myths that we hear from business owners and consumers. Yet the best debt collection agencies understand this issue and take it into consideration. They are courteous and professional and they collect debts without damaging the relationship between the client and their debtor. Their job is to ensure that both parties are satisfied and that the relationship continues once the debts are paid.

Many people face payment problems due to unexpected expenses or other financial difficulties, such as job loss or health issues. The debt collection agency seeks the best result for both parts involved. It will therefore do its best to find an amicable solution for each situation.

Debt collection agencies will not add any stress to your life, quite the contrary. They will help you resolve the situation as quickly and efficiently as possible.

 

2. Debt collection agencies would be expensive

Another myth about debt collection agencies is that they would be expensive. In reality, it couldn’t be further from the truth. Most debt collection agencies only receive a percentage of the amount collected and their intervention is usually covered by the amount collected. They can save you money by taking over the follow-up of unpaid bills, including sending letters to debtors and warning them of the consequences of unpayment, sending payment plans and collecting payments.

 

3. Debt collection agencies would be only for big companies

Debt collection agencies work with both small and large businesses. Don't be afraid to ask questions about how they willl approach your case and what they can do for your particular company. The key is to find a agency that understands your situation and will work with you to develop solutions based on your needs.

 

4. Debt collection agencies couldn't be used for recent debts

Many people think that debt collection agencies couldn't be used for recent debts. This is simply not true! In fact, it is best to use a debt collection agency as soon as possible. The sooner you do this, the more likely you are to get your money back, and this at a lower cost to you.

Each invoice has a limitation period. This means that once the invoice has been sent, you have a certain amount of time before your customer can discuss the prescription. This time varies by industry and country. Check with a collection agency to find out the limitation periods for your invoices and react as quickly ad possible!

 

5. It could harm the business's reputation

Many creditors don't use debt collection agencies because they think it could damage their brand. On the contrary! Working with a debt collection agency sends a signal of seriousness to your customers. You've done a job or sold property and you deserve to be paid. In addition, debt collection agencies are required to comply with sector-specific laws and a certain code of ethics. They act in a professional and courteous manner with you customers/debtors.

 

6. International debt collection wouldn't be possible

Although international debt collection can be challenging, it is not impossible. It does, however, require more resources and knowledge. You have to deal with a different language, culture, or legal system than you own. Some debt collection agencies have teams in different countries that have the knowledge and experience to collect your debt internationally.

 

To conclude, debt collection agencies are there first and foremost to help you. Entrusting them with the management of your unpaid invoices is efficient and profitable. They help you improve your cash flow while respecting your customers. It is quite possible to find a reputable debt collection agency with solid experience in managing unpaid debts in your industry.