Personal Debt Recovery
If you are owed money, you deserve to have it repaid. Whether it’s a friend that borrowed money and isn’t sticking to the repayment agreement, or a family member who hasn’t paid you back after a loan, being owed money can be stressful. Plus, it can have a huge impact on your own finances and your ability to keep up with your outgoings. A lot of debtors try to avoid repaying, leaving you out of pocket, but personal debt recovery is there to help.
Debt Recovery Agency vs. Small Claims Court
As a debt recovery agency, we specialise in the process of recovering all types of debt, including personal debts. We are able to bring a level of expertise that can speed up the entire debt recovery process, whilst also giving you a higher chance of success. Our knowledge of various negotiation techniques and debtor tracing capabilities can enhance the efficiency of debt recovery efforts, which isn’t the case if you choose to take things to court. Small claims court proceedings can be time consuming. The lengthy legal process, court dates and likely delays all need to be considered. It’s likely that you will need to invest significant time and effort into taking your debtor to court, impacting your ability to focus on other responsibilities.
Though debt recovery agencies do charge fees for their services, these costs are reasonable compared to the expenses associated with going to court. At Cobra Financial, we charge a fee based on the amount you are claiming and the complexity of the case, which is recoverable. Plus, our efficiency can result in a quicker resolution, reducing the overall cost of debt recovery.
If you take a debtor to small claims court, you are likely to spend a lot more on recovering your funds. Pursuing debt recovery through the small claims court involves filing fees, legal representation costs and other expenses. These costs can quickly add up, making it a more costly route.
Even after investing time and money into the small claims court process, there is no guarantee of success. The court’s decision might not be in your favour, and there is no certainty that you will receive the full amount owed. It’s also hard to enforce the judgement of the small claims court, and actually receiving the money can be difficult.
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The Benefits of Using a Debt Collection Agency
- Expertise – When you use a debt collection agency, you have access to a team of professionals experienced in negotiations and communication. At Cobra Financial, we are familiar with the ins and outs of debt collection, which can be complex, and this increases the chances of a debt being collected.
- Efficient – Pursuing personal debts can be time consuming, and it often requires a variety of resources. Outsourcing the task to a debt collection agency enables you to focus on more important things, knowing that a team of experts are handling the debt recovery process.
- Technology and Resources – There is a lot that goes into personal debt recovery, and debt collection agencies often invest in specialised technology and resources to streamline the process. Our resources can lead to higher recovery rates compared to handling things yourself.
The Downsides of Handling Personal Debt Recovery Yourself
- Emotional Strain – Personal debt recovery can be emotionally draining, especially if you are dealing with a debtor who is also a friend, family member or acquaintance. Personal relationships may become strained, leading to stress and discomfort in the process, and conflicts or misunderstandings with the debtor.
- Ineffective Communication – You might lack the necessary communication skills to navigate sensitive conversations about money, which are hard to avoid when you are collecting a debt. This could lead to ineffective communication, making it harder to reach a resolution.
- Stress and Anxiety – Dealing with the challenges of personal debt recovery can cause stress and anxiety. The emotional toll of collecting debts may impact personal wellbeing and happiness, and impact other aspects of your life, especially if the process is long and drawn out.
Personal Debt Recovery Fees and Costs
At Cobra Financial, we charge a fixed fee for personal debt recovery. We calculate this fee based on the amount of work involved, and how complex the debt recovery is likely to be. Complex cases tend to require more time, resources and work. But, this fee is recoverable, so you won’t find yourself out of pocket.
Once we have recovered the money you are owed from the debtor, we charge a 15% success fee. If it’s a B2B debt that’s being collected, we are able to add interest and compensation, in line with the Late Payment of Commercial Debt Act 1998.
The Personal Debt Recovery Process
The personal debt recovery process begins with a debt collection agency, such as Cobra Financial, assessing the details of the debt. This includes finding out about the debtor, the amount owed and the history of the debt. It’s then time to initiate contact with the debtor, informing them of the outstanding debt. This communication usually starts with letters, emails or phone calls, but it can move to face-to-face debt collection if they fail to engage. The initial contact aims to establish communication and provide the debtor with clear information about the debt.
Once the debtor has responded, we work with them to find a solution. This could involve setting up a repayment plan or negotiating a reduced settlement. If negotiations are unsuccessful, we utilise a variety of approaches until the debtor agrees to repay. We provide regular updates throughout the entire process, ensuring that you are always aware of the progress of our debt recovery efforts.
Starting the Personal Debt Recovery Process is Easy
With Cobra Financial, starting the personal debt recovery process is easy. Debt recovery can be a long process – especially if you have a debtor who is refusing to pay, or you can’t agree on the amount owed – but handing things over to a team of experts can streamline the process.
Let’s get started
For further advice and support, and to discuss your case in detail, then call one of the Cobra team on 0151 526 4222.
