When we are concerned about the debt recovery, legal procedure is considered as the last option in the list. Under the strong consequences of unpaid debts, debtors are preferred to be reminded about their responsibilities and due payments with the help of security compliance.Letter before Action
(LBA) is an important document of debt recovery services; it is used at the final stage of correspondence with the debtors.
Further, LBA will act as legal evidence, if the matter ends up in court. It will prove that you have attained all rational measures to keep away from legal actions. It may happen that LBA doesn’t remain effective for securing the payment from debtors. But it confers important attributes which give no prospect for debtors to defend themselves.
Looks complicated? Right!
Well, there is a solution. We have created a list of 10 Amazing Tips to Write a Debt Recovery Letter before Action
, and here it is:
Make sure that you used a precise address and email address so that debtors cannot refuse the LBA. While using email consciously receive a delivery and observe receipt in order to confirm the correspondence.
Use clear vocabulary and correct data to make sure that your focus is on debt recovery.
Add reference code and reference of your admin system that correspondences you with the debtor and their admin’ system, if they have any.
Describe the exact outstanding amount in the LBA.
Specify the payment deadline and outcomes of not paying the debt.
Inform the customers about the guidelines to contact you for disputed amount of debt.
Also include the information about debt recovery fees, compensation, and interest.
Give a clue about the issued CCJ and its effect on their credit rating.
Provide sufficient information about free credit report of their company.
Describe the payment method in detail.
With the help of these 10 tips, you can create a perfect Letter before Action for debt recovering. On the other hand, your solicitor can also send an LBA on your behalf. At Debt Nirvana
we provide full accomplished LBA template for providing prompt debt recovery services
to our clients.
Collections are not easy, especially when a lot of money is at stake. The more the amount of money your client owes you, the more imperative it is for you to be able to employ all possible means to recover your dues. Once all sources of collecting dues have been exhausted, you need to hire a debt collections agency
to do your bidding.
A well placed collections agency can not only recover your dues, but also help you make your business more efficient in the long run. Such agencies, when employed, act as your back up plan, thereby giving you reassurance that your money will be recovered in one way or the other. For this very reason, it becomes very important to take the necessary steps to hire the right collections agency.
Here are some steps you can keep in mind to hire the right collections agency for your business:
• Choosing between consumer and commercial collections agency:
Depending upon the type of customers you deal with on a day to day basis, you need to hire the right agency. There are different types of agencies which deal with individual collections and corporate collections. If your business is dealing with companies on a day to day basis, you should be hiring a commercial agency and vice versa. Ideally, it’s advisable to not mix the different agencies, to avoid incomplete collections.
• Is the agency recognized by a statute body?
If you are going to be hiring a third party collections agency, you would want to be on the right side of the law. Collections are a tricky business; if you don’t take the required precautions, you might end up getting sued by your clients you are collecting from.
• Type of collections process:
There are different ways to approach collections. Many collection agencies are extremely rigid in their approaches while many others are willing to change the tactics for some customers. However, one collection methodology might work for one type of business but might not work for another business vertical. In such cases, you need to figure out the collection strategies with your agency to try and understand if the methodologies will suit your business type.
• What is the turnaround time for the agency?
You are hiring an agency to collect money on your behalf. Since time is of the essence, it’s important to take into consideration the turnaround time for collecting debt
. The more the agency collects, the more recovery you can show in your book of accounts. This way, not only does your business prosper, but you also have enough funds to employ back into your business.
• What are the agency charges?
Since the agency will be charging you a fee for their collection services, you need to be on top of the charges. If the agency is taking a hefty fee for their services, you might want to look for alternate options for your debt collection. However, if the fee percentage is reasonable, only then it would make sense to go ahead and hire the agency.
While this is not an exhaustive list of the things to be kept in mind, it’s definitely some of the top points you need to consider during the hiring process.
Contemplating whether to hire a debt collection agency for your business
? Are your customers driving you into a debt ditch, with their overdue payments? If you have exhausted all possible sources of recovery by now, you must be considering hiring a debt collection agency for your business. The higher the debt you end up with, the more important a debt collection agency becomes for your business.
Given the importance of debt recovery agencies, it is necessary to ensure you take the right steps to hire a good debt recovery agency. By following these 5 steps, you can hire the perfect agency, which will help you collect all your pending dues, without having you worry about your recovery strategies.
1. Research is the key:
The more you research, the higher the chances of landing yourself a good collection agency. Different agencies specialise in different collection procedures; some might be excelling in securing funds from exponentially large organisations, while others might be collecting money from individuals and small businesses. Depending on the kind of customer base you have, you need to ask around for the right agency to help you recover your pending debt.
2. Strategy plays an important role:
You can’t negate the importance of a good collection plan. Since every business has a different customer base, there are different strategies needed for collecting money. While one strategy might do wonders for one type of business, it might completely backfire for another business. Keeping this reason in mind, a good agency will always be flexible enough to understand the customer’s needs before recreating the recovery strategies needed.
3. Fee’ it up: Different agencies charge differently;
while some agencies might be charging a minimal amount for their services, many others might charge more than the normal going rate. At the end of the day, the fee is their way to earn from the customers’. The idea is to gauge your needs and your bandwidth when it comes to shelling out the required fee amount. If you are satisfied with the track record of the agency in question, you can try negotiating with them for the fee charged.
4. Skip Tracking tactics:
When customers’ are faced with debt collection notices, they tend to make a run for it. Even though this is not a legal practice, it does not mean that people will not do it. In order to combat the situation, many collection agencies use a procedure also known as ‘skip tracing
’. Through this process, agencies make use of different databases to locate the errant debtor, so that they can make them pay the pending dues. A good agency should always posses the right tactics to trace such customers and recover their client’s dues.
5. Progress updates are important:
When you are getting work done from an external agency, the idea is to always be in the loop. Since you are dealing with customers, it’s important to be updated at all given times. The frequency should be mutually decided at the time of initiation, in order to help figure out the change of plans, if needed. The higher the frequency, the more well planned and detailed a business’s approach would be to combat the problem of debtors.