CreditXS commercial debt collection service

How Debt Collection Works


Mention the words debt collection or debt recovery to most people and they immediately get a vision of a burly tattooed bloke with a crew cut, limited vocabulary and baseball bat. The reality is far removed from this.

While there may be unfortunate times when your business needs to employee the services of a bailiff or sheriff (who may or may not look like your mental picture), thereís a long process to go through before they can just turn up on your debtorís doorstep to take away his car, computers and first-born child. When you engage the services of a professional debt recovery business like My Credit Controllers, there is a process to follow, and this process happily gives your debtor many opportunities to change their mind and settle your unpaid invoice.

Attempts to Contact

The first thing to do with a debt is to contact the company that owes you money and find out if thereís a reason why they have not paid. Perhaps they claim that they didnít receive your invoice, or perhaps your invoice was incorrect and is now sitting in the Ďdisputedí pile. While sometimes these reasons are just excuses to avoid paying, sometimes they are genuine. Best of all, theyíre quickly and easily resolved.

Payment Plans

If a company says that they are in financial difficulty or canít pay you, then the next step is to see if you can agree a payment plan for the debt. Here, the debtor commits to pay the debt in instalments over an agreed length of time and in agreed instalments.

Itís important to at least attempt to reach a compromise with the debtor because if you do end up in court, judges will look more kindly on your side of the argument when they can see that you have tried to act in a constructive way to settle the dispute without taking up expensive court time.

Final Warning before Action

If you canít agree a payment plan, or the debtor is unresponsive, then the last step before going to court is to issue a final demand. This communication will be sent by both email and by registered mail.

Here you issue a deadline after which if the debtor has not paid in full you will commence legal proceedings to recover your debt. Before issuing such a demand it is important that you are absolutely committed to following through. It's not good practice to issue threats and not act on them, and doing so could be interpreted as harassment.

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If the debtor does not respond to your final demand or they do but you canít agree a payment schedule, then you have no further options except to take them to court. The process of taking a debtor to court is described in detail here.

Court Judgement-backed Payment Plan

The most likely outcome from a court action is that the judge imposes a payment plan on your debtor. With a judgement backed payment plan youíre in a much stronger position than a payment plan agreed between you and the debtor. If the debtor fails to pay you at the agreed time you can apply to the court for a warrant for bailiffs to seize property and goods to the value of your debt. It is only at this point as a complete last resort that the big blokes get involved.

Why use a Debt Collector?

Of course itís possible to do all of this yourself, but youíve probably got more constructive things to do with your time. The big advantage of involving a professional debt collection service is that it sends a clear message to the debtor that things have got serious and itís time to pay up. If the debtor company is financially stressed, then theyíre probably juggling who gets paid at the end of each month. By elevating your late invoice and involving a specialist in business debt recovery that has the know-how to see the process right through to court, youíve just moved your invoice right up to the top of the list.

Most companies pay up very quickly once we contact them and we have normally collected in the debt long before court proceedings are necessary.

You have a statutory right to add interest and recovery costs to a late payment from a commercial customer. This means that, if you choose to, we can add our fees to the debt - your customer effectively pays our fee and our service ends up costing you nothing.


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Debt Collection

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