There’s a lot of information out there about the debt recovery process, but how much do you know about the debt recovery timeline? The debt recovery process doesn’t happen overnight, and it can take a while depending on the complexity of the situation, the size of the debt and whether you agree that you owe the debt. To fully understand how the debt recovery process is progressing and what you can expect along the way, it’s a good idea to understand the timeline.
The Main Stages of the Debt Recovery Timeline
The debt recovery process begins when the person who is owed money starts taking steps towards collecting funds from you. There’s no set date on which the process must start, and some people act quicker than others. The process itself can differ too, depending on how quickly they act, how they want to deal with the debt, and what actions they decide to take.
Some people start the process after one or two missed payments, whereas others wait until more payments have been missed.
- One or Two Missed Payments – Once you have missed one or two payments, you will usually be contacted by telephone or in writing. The person you owe the money to will remind you of the debt, give you the choice to make up the missed payments and bring your account up to date. They may also ask you about your financial situation and why you are struggling to pay.
- Three or Four Missed Payments – Once you have missed three or four payments, you’re likely to notice that the pressure to repay increases. You might find that further action is threatened and you might be directed towards a debt advice service, and letters and telephone calls feel more threatening. This is also when you’re likely to get a default notice, which impacts your credit score. This is also the stage when your account is likely to be closed, when your debt is sold to another firm or when a debt collection agency is brought into the mix.
- Five or Six Missed Payments – At this stage of the debt recovery timeline, you will start getting a lot of letters and phone calls, and it’s when a debt collection agency takes over. At this stage, it’s a good idea to agree to a payment plan with the debtor or debt collection agency, or to repay the debt in one go if you can afford to. This is also when County Court Judgements (CCJ) are considered, which will affect your credit score.
Regardless of where you are in the debt recovery timeline, it’s important to repay the funds owed as quickly as possible, before further action is taken. At Cobra Financial, we work with creditors, businesses and individuals to recover funds from debtors. We have a wide range of tools and techniques in our arsenal, as we know how stressful it can be to be owed money from someone who’s refusing to pay. To find out more about the debt recovery timeline, get in touch.
