How using a debt collector could save you thousands
Using a debt collector isn’t a service that any person or business wants to have to use, but sometimes it is essential to make sure that you’re not out of pocket, and that you receive as much money back from your bad debt as possible.
Unfortunately for those offering credit, there are ways out for people when they are in debt which can see them paying back next to nothing. These solutions sound great for the person in debt, but they can offer serious and long-term problems for the people who provided the credit to them.
The most well-known such solution is bankruptcy. If someone has large assets that can be sold, then it’s possible that you may receive money back, but this is rare. The majority have little to no assets and even if they do, the Official Receiver may decide they are essential to the debtor. If they have a healthy income, they may be asked to pay into an Income Payment Arrangement, but this may be a low sum and only lasts for three years. After fees, this may leave you with a very low return.
Individual Voluntary Arrangement (IVA)
Another solution commonly used is an Individual Voluntary Arrangement (IVA) where a debtor pays in their disposable income, usually for five years, and the funds are then distributed to the creditors. While this may sound good, the fees for a company providing the IVA can be high and payments are usually low, meaning you could receive back a small fraction on the debt balance.
Gives them legal protection
Once both these solutions are complete, you have no claim to the money owed, you have to settle for nothing, or very little. This is why using debt collection as soon as possible is vital. These solutions provide legal protection from any collection action, so you need your debt collecting before the debtor decides to go down the route of insolvency.
Insolvency services can leave you with nothing. If you want to get as much money back as possible, you need to act fast. Contact First Capitol today and we’ll let you know how we can get back the money you’re owed.