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The Benefits of Hiring A Debt Collection Agency

Businesses are often conflicted over whether or not they should hire a debt collection agency. In most cases, they are worried that they will incur extra costs to recover debts that will never get repaid. The extract below details several reasons your business should hire a debt collection agency

Legal Protection

One of the downsides of trying to recover bad debts is that you could break the law. For instance, if a malicious person owes your business cash, they could go into hiding. Once you locate them, you could get emotional and trespass on their property or assault them. Once this happens, you could land into legal troubles that could damage the reputation of your business.

Conversely, debt collection agencies follow strict legal procedures when collecting your debt. Typically, they do not use force or intimidation. Instead, they approach the debtor and commence negotiations on how they intend to repay the debt. Moreover, they explain the implications of pursuing legal action against the debtor. For instance, it would be difficult to access credit or insurance. If the debt collection agencies break the law, they have professional indemnity coverage that caters to lawsuits and pays compensation. Therefore, your business does not suffer any blowbacks. 

Faster Collection 

In most cases, you are the debtor's mercy. It is especially so if they no longer need your products or services. The presence of a third party is enough to trigger the debtor to pay. Unlike the creditor, the collection agency does not ask the debtor to repay the debt at once. Instead, it draws a repayment plan for the debtor to pay in instalments. This way, their finances do not take a hit. Although this arrangement may not be your desired outcome, it ensures the debtor repays the debt. 

Documentation

Suppose you intend to take the bad debtor to court; you will need documentation to prove your claim. A significant benefit of engaging a collection agency is that it gathers all documentation required to file the case in court. Moreover, the involvement of the collection agency proves to the court that the debtor is unwilling to repay the debt. This accelerates the court process since the judge could decide to give a judgment instead of asking parties to consider a repayment agreement. For instance, the judge could issue a ruling to auction some of the debtor's assets to recover the debt. 

When engaging a collection agency, conduct due diligence to ensure it has the resources and expertise needed to recover the debt. Moreover, the agency must have an operating licence and insurance coverage. 

About Me

Getting a margin loan

I am really eager to build up my investment portfolio. I'm still pretty young, so I think I'm in a good position to take some calculated risks. I already own an investment unit with mortgage on it, and now I'm taking out a margin loan so that I can buy a share portfolio. This blog is all about getting loans and financing so that you can gear up your investments and make higher returns. I am excited about growing my investments. This blog will be useful for anyone who is looking to make use of investment loans such as margin lending.