Many people who aren’t involved in the process of recovering debts, as I am, may be confused about the various ways of approaching it. In particular, debt collection and enforcement — what are they, and how do they relate to one another
A debt collection agency (DCA) is used when direct attempts to get payment aren’t working. Some will buy the debt from you, often at a knock-down price, and then recover the money for themselves. Others, like me, take on your case on a “no collection, no fee” basis and work for you.
The first method obviously has the advantage of getting some of your money right away. The second means you eventually get it all less the fee — and, since we only get paid if we succeed, you can be sure a DCA will pull out all the stops.
The usual channels are phone-calls, emails, letters and texts. Gone are the days when a DCA would “send the boys round”. I may visit the debtor in person, but it’ll be conducted in a professional way, and I have no powers to seize the debtor’s goods.
Negotiation and pressure applied professionally will often solve the problem if the debtor is just trying to avoid paying for as long as possible. However, if they either can’t pay or seem determined to avoid it altogether, your DCA can help you bring a case in the county court to request a county court judgement (CCJ) which normally requires the debtor to pay within fourteen days.
If the debtor fails to comply with the CCJ, you can apply for enforcement action. This is authorised by the court and undertaken either by a County Court Bailiff or a High Court Enforcement Officer.
An Enforcement Order will be sent, which the debtor has seven days to respond to. Failing that, the enforcement officer can visit the debtor’s premises and seize goods to the value of the debt — though they have no power to force entry if refused. The goods may either be sold to raise the money or held until agreed instalment payments have been made.
Which Is Best?
All cases are individual, but most often the quicker route of using a DCA is likely to result in payment. The court route may be better if you know there are multiple creditors you’ll have to compete with for funds, but even then it’s best to have a DCA supporting you.
If you’re unsure which is the best approach for you, you’re welcome to get in touch with me for a chat.