A new legislation was introduced in the UK in November 1998. The legislation made it mandatory for businesses to pay an interest on a commercial debt if they make late payments. Taking into account of a variety of EU directives, the legislation has been amended and it has proven to be very useful for small businesses that frequently encounter the problem of late payments.
Now that the legislation has been revised, debt recovery costs and interest can be recovered by businesses on monies that a debtor owes them directly. Any UK debt collection firm can also enforce this legislation. They often manage to completely replace or offset their fees from the additional amounts they collect.
It is entirely up to the creditor as to when they decide to give a debt collection firm a call. However, they should keep in mind that it becomes more unlikely for a debt to never be paid if it is allowed to remain unpaid for a long period of time. So, creditors should get in touch with a debt collection firm as soon as they feel suspicious that a debtor is not going to pay the debt, and as close as possible to the overdue payment date.
It is recommended that the debtor should be contacted if a payment is not made on time and there is no sign that it will ever be made. If there is a genuine reason behind the debtor missing the payment, then they must agree to make an instant payment as soon as possible.
If contacting the debtor does not lead to a payment either, it is a sign that the debtor has no intention of repaying the debt. Creditors should also be wary of the typical excuses that debtors tend to make, such as claiming that the cheque is the post or that they will make the payment next week. They make this type of excuses simply to delay the payment. Creditors must keep in mind that it is their money and they have the right to be paid back on time.
When outstanding debts are placed with a debt collection company for recovery, it signifies the creditor’s seriousness about their credit control and ensures the protection of their cash flow. When creditors refer debts to a collection firm early, the firm is able to recover the debt more easily. Creditors who are in doubt can even seek free advice from these firms.
When a UK debt collection firm is contacted, debtors are requested to provide the details of the debt they want the firm to recover. The fees are also confirmed at this point. Once the creditor is content with the firm, proceed to recover the debt right away. All possible avenues are pursued in the attempt to recover the debt and they keep the creditor informed of their progress. In most cases, the outcome is rapid and successful, and if any difficulties do arise, then possible solutions are eventually figured out.