"Selling" debts and other debt collection methods
Discussion
Has anyone had any success with debt collections? I'm getting exasperated with using solicitors as all that seems to happen is they generate a huge bill and the debt remains unpaid. Even bailiffs seem an empty threat these days.
I'm sure I've seen adverts where you can "sell" your debt to an agent who will pay you a percentage and then go off to "obtain" the rest of it as their commission. Has anyone used this method, or got any alternative methods? Thankfully it's not something I need very often, but occassionally one gets away...
I'm sure I've seen adverts where you can "sell" your debt to an agent who will pay you a percentage and then go off to "obtain" the rest of it as their commission. Has anyone used this method, or got any alternative methods? Thankfully it's not something I need very often, but occassionally one gets away...
It's called factoring and has been around for decades. It CAN work but is an extremely expensive way of collecting unpaid amounts. Indeed, in some cases, if the factoring agent can't collect the debt either, they will take the advance they gave to you back and dump the original debt back on you - and charge you for the priviledge.
Factoring always looks tempting until you find out the TRUE cost of how it works.
Factoring always looks tempting until you find out the TRUE cost of how it works.
It's not particularly bad - touch wood. I certainly don't want to get involved with factoring.
It's the principle of the thing that wrangles the most. In the past we have had cases which have gone to court and in each case the court sympathises with the debtor who cries the poor tale and is given extension after extension and finally flounces off into the distance and all we have is a legal bill for our troubles. Or in other cases people have ignored all solicitors letters, waved two fingers to the bailiffs and are still happily trading. It just seems the whole law around debt collection is so heavily skewed in favour of the debtor. It's also extremeley long winded, expensive, and ultimately pretty useless.
I just wondered if there was an option where after a certain point if I felt a debt was going bad I could just take a view on it that even if I only got 50% back it would be better than wasting time and spending good money after bad.
I suspect what I was really hoping for was someone to say "I just ring Big Jim and he sends the boys round".
It's the principle of the thing that wrangles the most. In the past we have had cases which have gone to court and in each case the court sympathises with the debtor who cries the poor tale and is given extension after extension and finally flounces off into the distance and all we have is a legal bill for our troubles. Or in other cases people have ignored all solicitors letters, waved two fingers to the bailiffs and are still happily trading. It just seems the whole law around debt collection is so heavily skewed in favour of the debtor. It's also extremeley long winded, expensive, and ultimately pretty useless.
I just wondered if there was an option where after a certain point if I felt a debt was going bad I could just take a view on it that even if I only got 50% back it would be better than wasting time and spending good money after bad.
I suspect what I was really hoping for was someone to say "I just ring Big Jim and he sends the boys round".
Try JamesUK28 on here, he's had a lot of success and got quite a few debts paid for me.
I've had trouble contacting him today, but send him an email and he usually responds.
Website is www.debtcollectioncompany.co.uk
I've had trouble contacting him today, but send him an email and he usually responds.
Website is www.debtcollectioncompany.co.uk
Eric Mc said:
Factoring always looks tempting until you find out the TRUE cost of how it works.
Ohhh yes!Also Invoice Discounting which I think is pretty much the same. Many fall into the trap of having both this AND an overdraft.
From bitter, recent experience (will post details in a few weeks when all is finally sorted!), I think I'd put Bermondsy Dave ahead of factoring in the debt collecting list of preferences any day!
Used properly factoring is a way of releasing cash from issued but as yet unpaid invoices - the advance rate and fees you get are contingent on the risk associated with getting paid, in full, in a timely manner.
Personally I think you'd be crackers to try and factor an already bad debt - if indeed you could find a factoring house willing to take the risk associated with it - but may be surprised at how many organisations use this (and other forms of invoice related finance) as an integral part of their working capital management on an ongoing basis... including some very big ones.
If it's ongoing peace of mind then the product you may want is known as trade credit insurance (aka "Debtor Insurance") or, if you want the cash early, "non-recourse" factoring/discounting (where the financial institution can't come back to you if they don't get paid). Both of these cost though.
Personally I think you'd be crackers to try and factor an already bad debt - if indeed you could find a factoring house willing to take the risk associated with it - but may be surprised at how many organisations use this (and other forms of invoice related finance) as an integral part of their working capital management on an ongoing basis... including some very big ones.
If it's ongoing peace of mind then the product you may want is known as trade credit insurance (aka "Debtor Insurance") or, if you want the cash early, "non-recourse" factoring/discounting (where the financial institution can't come back to you if they don't get paid). Both of these cost though.
Debt purchase is now a major business in the UK. Mainly on consumer debts. However some companies do buy SME debts as well. Especially non limited SME debts.
Depending on the process the debt has been through, the size of it and age and how it is/isn't secured then debts can sell from £0.005 pence in the £ through to £0.18p in the £. However the latter would need to be a sellers market and a 'perfect' secured type debt.
The UK is still a buyers market at the moment, the amount of debt sold in the UK during 2009 declined by around 2/3rd due to confidence issues.
Depending on the size of the debts outstanding, have you considered issuing stat demands to the debtors? If you do and a business wants to keep trading they have to defend the action so it can be a pain for them as much as anything else.
Drop me a PM if your interested in any more info. Best of luck.
Depending on the process the debt has been through, the size of it and age and how it is/isn't secured then debts can sell from £0.005 pence in the £ through to £0.18p in the £. However the latter would need to be a sellers market and a 'perfect' secured type debt.
The UK is still a buyers market at the moment, the amount of debt sold in the UK during 2009 declined by around 2/3rd due to confidence issues.
Depending on the size of the debts outstanding, have you considered issuing stat demands to the debtors? If you do and a business wants to keep trading they have to defend the action so it can be a pain for them as much as anything else.
Drop me a PM if your interested in any more info. Best of luck.
i would be interested in knowing how you get on. i have two small outstanding debts, i have tried putting both of them through a debt collection company but with no joy. In fact they were CRAP.
First one is for 2.5k for the painting of a customers horse box, their check bounced then they claimed the orginal contract was not with our self's as a coach builder put them on to us! although i have a signed piece of paper saying they would repay us after confronting them on their door step.
second is for just £350 for storage as the customer could not come up with the cash up front to have their vehicle painted, left it out side and they took it back. they said that because we didn't stick within our contracted time scale they wanted the vehicle back and was not going to pay for storage, although no time scale was agreed on paper or verbaly.
any views on these would be welcome
Rich
First one is for 2.5k for the painting of a customers horse box, their check bounced then they claimed the orginal contract was not with our self's as a coach builder put them on to us! although i have a signed piece of paper saying they would repay us after confronting them on their door step.
second is for just £350 for storage as the customer could not come up with the cash up front to have their vehicle painted, left it out side and they took it back. they said that because we didn't stick within our contracted time scale they wanted the vehicle back and was not going to pay for storage, although no time scale was agreed on paper or verbaly.
any views on these would be welcome
Rich
RicksAlfas said:
Has anyone had any success with debt collections? I'm getting exasperated with using solicitors as all that seems to happen is they generate a huge bill
Don't pay anyone fees upfront. Pay on performance, if they're any good then they'll be happy with that.I use Colin at Chambers. www.chamberslegal.co.uk - I'd happily recommend him, he's pulled me out of the mire many a time.
We have found, that to get a debt paid it needs to be over 700 gbp and owed personally. We arrange for a process server (just google for a local one 40 - 80 gbp ) to serve a statutary demand for payment which is the first process in making someone bankrupt. 9 out of 10 creditors pay up when served if they have any assets eg their own property. The other 1/10 pays when we get a court date for their bankruptcy hearing however this involves more costs and only proceed to this stage if we are confident they have assets it cost £900 which includes a £600 bond to the Insolvancy service. We add on all our costs and have been very successful recovering our bad debt in this way. Now we only give credit to small limited companies if we get a personal guarantee for the account to protect ourselves. Good luck with recovering your debts.
Edited by Tazio1 on Thursday 17th February 09:23
Edited by Tazio1 on Thursday 17th February 09:44
richtvr said:
First one is for 2.5k for the painting of a customers horse box, their check bounced then they claimed the orginal contract was not with our self's as a coach builder put them on to us!
IIRC, a cheque is a 'promise to pay'. If someone has given you a cheque then they are acknowledging the debt and will find it very hard to wriggle out of it later.I'd go straight to moneyclaimonline. Do you still have a copy of the bounced cheque?
richtvr said:
i would be interested in knowing how you get on. i have two small outstanding debts, i have tried putting both of them through a debt collection company but with no joy. In fact they were CRAP.
First one is for 2.5k for the painting of a customers horse box, their check bounced then they claimed the orginal contract was not with our self's as a coach builder put them on to us! although i have a signed piece of paper saying they would repay us after confronting them on their door step.
second is for just £350 for storage as the customer could not come up with the cash up front to have their vehicle painted, left it out side and they took it back. they said that because we didn't stick within our contracted time scale they wanted the vehicle back and was not going to pay for storage, although no time scale was agreed on paper or verbaly.
any views on these would be welcome
Rich
Please make it clear it was not me you put these claims through, as Alison has posted a link to one of our older websites. ThanksFirst one is for 2.5k for the painting of a customers horse box, their check bounced then they claimed the orginal contract was not with our self's as a coach builder put them on to us! although i have a signed piece of paper saying they would repay us after confronting them on their door step.
second is for just £350 for storage as the customer could not come up with the cash up front to have their vehicle painted, left it out side and they took it back. they said that because we didn't stick within our contracted time scale they wanted the vehicle back and was not going to pay for storage, although no time scale was agreed on paper or verbaly.
any views on these would be welcome
Rich
ETA most legit debt purchasers are only interested in debt books, ie multiple debts circa £100k, debt collection is usually the best route for single debts.
Edited by jamesuk28 on Thursday 17th February 10:11
I am surprised that no one has mentioned the Small Claims Court. The system is easy to use, the fees are modest and one does not need a solicitor. Of course obtaining a CCJ against someone does not force them to pay. Next one needs to apply to the court for an Oral Examination. The debtor then has to attend court and declare his finances (in particular who he banks with) It won't be all that easy for someone with a CCJ to change his bank so one can then apply for a garnishee order against his bank. What this does is to put the creditor at the top of the list of people to be paid when money goes into the account. When things go this far its basically a grudge match against someone who has been taking the p***. Nevertheless it is a really great feeling when one wins.
I AM NOT A LAWYER AND WHAT WORKED FOR ME MAY NOT WORK FOR YOU! Use this information at your own risk. Incidentally the court fees get added onto the debt and the debtor has to pay them :-) Of course a man of straw may decide that it is worth going bankrupt in order to avoid paying.
Anyone with a CCJ will not usually be able to obtain a mortgage or other types of credit. This may not however concern the cash-in-hand types with no fixed abode. As always "Know thine enemy."
Good luck!
I AM NOT A LAWYER AND WHAT WORKED FOR ME MAY NOT WORK FOR YOU! Use this information at your own risk. Incidentally the court fees get added onto the debt and the debtor has to pay them :-) Of course a man of straw may decide that it is worth going bankrupt in order to avoid paying.
Anyone with a CCJ will not usually be able to obtain a mortgage or other types of credit. This may not however concern the cash-in-hand types with no fixed abode. As always "Know thine enemy."
Good luck!
RicksAlfas said:
Has anyone had any success with debt collections? I'm getting exasperated with using solicitors as all that seems to happen is they generate a huge bill and the debt remains unpaid. Even bailiffs seem an empty threat these days.
I'm sure I've seen adverts where you can "sell" your debt to an agent who will pay you a percentage and then go off to "obtain" the rest of it as their commission. Has anyone used this method, or got any alternative methods? Thankfully it's not something I need very often, but occassionally one gets away...
Depending on the job in hand one can sometimes run rings around ineffective solicitors who just waste your money writing endless ineffective letters at £40 a time (it was a long time ago) The case in question concerned a farmer who had diversified into having camping and caravanning on his land. The stroppy council claimed that he didn't have Planning Permission or Established Use and wanted to shut him down. Although the person still does not use the Internet nevertheless he was able to find an Aerial Views photography company. This company had photographs that were well over twenty years old showing numerous caravans in the fields. Voila! the councils arguments were blown completely out of the water. They were bad losers however and kept nitpicking for a long time but eventually they went away. Nitpicks included "We think you should have a poster with a list of doctors in case any of your campers falls ill." After the poster was put up the council said "We think you should have a list of vets in case any of your campers bring pets which fall ill." Bad losers?I'm sure I've seen adverts where you can "sell" your debt to an agent who will pay you a percentage and then go off to "obtain" the rest of it as their commission. Has anyone used this method, or got any alternative methods? Thankfully it's not something I need very often, but occassionally one gets away...
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