By Anica Cunanan, Solicitor at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group
The debt collection process is one which causes a lot of hesitation and frustration which can lead to a misunderstanding of what the key differences are between a debt collection agency and a debt collection lawyer.
Some creditors choose to handle such matters on their own whilst others choose to engage with a debt collection agency at first instance. That being said, engaging with a debt collection lawyer is a step which many avoid due to some misconceptions of how lawyers deal with the debt recovery process and by the same token, engaging a lawyer can seem daunting.
Well, what approach should you take and are there certain circumstances where one is more appropriate than the other?
There are various factors that need to be considered when deciding on whether to engage a debt collection agency or debt collection lawyer, such as:
- the relationship of the debtor and creditor;
- the size of the debt owed;
- the available options if proceedings are commenced; and
- a whole range of other factors (which vary on a case by case basis).
A debt collection agency generally has limited options once a debtor refuses to pay due to disputes that may arise in the contractual and legal aspects. Once a dispute arises, depending on the size of the debt owed, creditors often choose to move onto a debt collection lawyer in order to move the matter forward. This may cause some delay and difficulty in the process of transferring a matter from a debt collection agency to a debt collection lawyer.
Should a creditor engage a debt collection lawyer in the first instance, this can give a wider range of options to pursue the debt, than those which a debt collection agency can provide. However, the key difference between a debt collection agency and a debt collection lawyer is that should the matter need to progress to litigation, a debt collection lawyer will already be familiar with the matter and can provide advice regarding the prospects of your success moving forward and the options available to you.
At Matthew Folbigg Lawyers, we are happy to discuss your options and we do not charge commissions on the monies collected. We understand the nature of cost effectiveness, especially given the nature of the debt recovery process. We can provide you with the tools to assist you with the debt collection process and we are only a telephone call away.
Matthews Folbigg Lawyers has a specialist team dedicated to Insolvency, Restructuring and Debt Recovery.
If you would like more information or advice in relation to Insolvency, Restructuring or Debt Recovery practice and procedure, please contact Stephen Mullette or Jeffrey Brown on (02) 9806 7459 or (02) 9806 7446, or email stephenm@matthewsfolbigg.com.au or jeffreyb@matthewsfolbigg.com.au.
