What Is the Difference Between Debt Collection and Debt Recovery?
While debt collection and debt recovery sound like very similar terms, there are some key differences between them. Both terms involve an attempt to recover money that has not been paid, but the difference lies in the party that is responsible for collecting the debt payment. At Access Law Group, our debt recovery lawyers are highly experienced in settling such matters in an efficient and professional way. Read on to gain a better understanding of both these terms.
What is Debt Collection?
If an individual misses a payment towards a loan or service, the creditor (i.e., the person to whom the money is owed) will initiate contact in an attempt to recoup the payment. With debt collection, trying to recoup a debt is kept “in house”, or pursued by the creditor. Emails, phone calls and other kinds of direct contact count as attempts at debt collection. Large organisations have teams dedicated to the collection of debts and if they are unable to make any headway with a debtor, they may hire debt recovery professionals as a third party to escalate the matter.
What is Debt Recovery?
After the creditor has exhausted their options and is unable to retrieve the debt after multiple attempts, they may choose to employ a third party to recover the amount. When a third party is charged with recovering a debt, the correct term to describe this act is debt recovery.
Debt recovery professionals will contact the debtor by phone or letter to inform them and begin the process of taking them to Court over the claims. The debt recovery process is well documented and will most likely impact a debtor’s credit score. Ignoring a notice from a debt recovery agency or failing to show up to Court can result in a judge automatically ruling against the debtor.
Efficient Debt Recovery Lawyers in NSW
The legal team at Access Law Group is experienced in carrying out precise and efficient debt recovery services for a wide range of individuals and commercial enterprises. Our team will ensure that all communication with the debtor and all consequent legal proceedings are handled with a high level of legal knowledge and transparency. Contact us today to find out more about commercial litigation lawyers and family dispute resolution lawyers.