Why Debt Collection Companies Are Better Than Lawyers

By Author: Belinda Darling
Total Articles: 152
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Chasing a debtor in order to recover your hard earned money is never a pleasant experience. Whether they are avoiding their payments because they can't afford them, or maybe they need more time to make payment or perhaps they have turned being a debtor into a profession, it is not a pleasurable task trying to recover the money. Unfortunately, these people exist in every country in the world and Australia is no exception.

The downside for a business chasing a debtor, is that it absorbs both valuable time and resources, since the business has to allocate a portion of both the human and financial assets to make the recovery. This can prove to be a very "hit and miss" affair and so it is important to remember that when the question of debt recovery arises, the business can contract in the resources, by utilising the services of a debt collection company.

Debt collection companies are not a new phenomenon but have been around for hundreds of years; basically as long as loans have existed. Whether it was a single individual working out of a dingy back-room with no additional manpower, or the professional, fully trained ...
... and highly staffed operations we see today, debt collection companies have become an integral part of the business world in the present Australia and indeed, throughout the entire world.

In Australia, there are many such companies, ranging from large, professional conglomerates with head offices in cities such as Melbourne, Sydney and Brisbane, down to the local small, town enforcer. Debt Collectors Melbourne have their operations based in the city to enable them easy access to businesses and residents within the area. Best of all, unlike lawyers, they don't charge by the hour and they don't take holidays!

What is the advantage of engaging a debt collection companies? Well, by contracting one of these companies to act on behalf of a business, that business is employing a specialist company whose sole “raison d'etre” is the successful collection of monies owed to that business and that is their only interest! A lawyer, who offers debt collection, along with many other services, does not have this dedication, since in pure non-legal matters, lawyers end up being almost a jack- of-all-trades and not a true master of any particular one.

An experienced, reputable and professional debt collection company is truly versed in all probable issues that may arise when confronting a debtor. A missing debtor can often mean the end of any chance of getting back your money, but a large, professional debt collection company, with its network of offices and contacts, can easily trace such debtors.

Unlike lawyers, who bill by the hour for time expended on a case and expect payment whether the outstanding money is recovered or not, a debt collection company only expects payment when the physical money from the debtor is actually recovered and the fee is directly related to an agreed percentage of the amount recovered. The larger the amount recovered, the larger the fee!

A further example of the benefits to a business of this fee structure, becomes even more obvious when a debtor is taken to court. Although judgement may be granted in favour of the business, actual repayment of the debt, due to the debtors alleged financial hardship, may well be spread over many years. A lawyer will not wait that long for payment of their billable hours and so in the short term, even with a favourable judgement, the business could find itself severely out-of-pocket.

In the vast majority of cases in the Melbourne area, using Debt Collectors Melbourne would be far more cost-effective than engaging a firm of lawyers.