7 Debt Collection Myths
So many people hesitate when it comes to hiring a debt collection agency. Some even think that a man will be sent to your customer's house, potentially even with a baseball bat. With a low and threatening voice he'll say, “I’m here to collect your debt”.
This definitely isn’t realistic. You will never come face to face with a debt collector who threatens you with a baseball bat. But our experience has shown us that a lot of business owners have misconceptions and certain fears when it comes to hiring a debt collection agency. Don’t let these misconceptions stop you from hiring professional help when you need it the most. Here are 7 debt collection myths, and the truth about them.
1. Debt collection agencies are expensive
That is a common myth about debt collections agencies. But it couldn’t be further from the truth. Most debt collection agencies only get paid a percentage of the amount collected, including some administrative costs. So, next time that you have an unpaid invoice that you are thinking of writing off, consider hiring a debt collector instead.
2. It will hurt relations with customers
A lot of SME’s conduct business repeatedly with the same customers and want to maintain a good and healthy relationship with them. Because of that, they are afraid that hiring a debt collection agency will damage the relationship they have built. Good debt collection agencies understand that and take it into consideration. They collect debts without hurting the relationship with the debtor.
3. Debt collection is only for big companies
Another misconception is that debt collection is applicable only for major corporations. Whilst big companies may have larger debts to collect, it’s common for small companies to have more frequent debt to collect which makes them good candidates for debt collection agencies.
Regardless of their size, all companies care about profit but when it comes to debt recovery very few have in-house specialists. This task normally lays at the foot of the Finance Manager and is rarely one that’s enjoyed. Unpaid invoices are not to be left though. You need to act quickly if you want to get your invoice paid. Debt recovery agencies can unburden you, act fast and ensure you get what’s rightfully yours.
4. They can’t be used for new debts
A lot of owners believe that they should wait for some time before they hire an agency. That is the exact opposite of what they should be doing. The sooner you hire a debt collection agency the more chance you have of collecting your money, with a smaller cost for you.
Invoices can expire however. Every invoice has a limitation period. If uninterrupted, once the limitation period expires, the invoice can no longer be collected. The limitation period differs from country to country.
5. It is bad for the company’s reputation
Many creditors avoid debt collectors as they believe that debt collectors will damage their brand. However, it is very common in today’s world for a company to hire a debt collector. Furthermore, agencies want to collect the debt but also keep their customers happy. Thus, they will not act unethically and certainly not illegally.
6. It's time consuming
If you hire a debt collector early, they will more chance of collecting your debt quickly during the pre-legal phase. In case that is not possible then you might have to go to court. The duration of a court proceeding varies significantly between countries. That’s why we recommend hiring a collector as soon as possible. At Bierens, we give you frequent updates so that you can go back to work without losing time dealing with your debtor.
7. International debt collection is impossible
International debt collection is difficult, but at the same time it’s not impossible. If it was, we would be out of business. It requires more expertise and resources than a normal claim. You have to operate in a different language, different culture, and different legislation than the ones you are familiar with. But, that’s why we are here to help you. We are an international debt collection law firm and we have in-house lawyers and local associates for the largest European economies. Our group of lawyers and debt collection specialists have the expertise and experience to collect your cross-border claim.
At Bierens, we operate on a No Cure, No Pay basis and we only get paid a percentage of the amount that we collect. We understand how important it is for your company to collect unpaid invoices without hurting your business relationship with your clients. We have done this for more than 65 years and we are the experts when it comes to international debt collection.
If you have any questions relating to the above information or have an unpaid invoice, get in touch today. We will happily assist you.