Collecting debts can prove to be a tricky task. Many of our clients voice concerns about the difficulties of chasing a debt, without chasing away their clients. Indeed, debt collection practices have come under increased scrutiny in recent years, with many people expressing a negative opinion towards unorthodox debt recovery methods. Here, we look at why a debt recovery letter from a solicitor may be more beneficial to you than a letter from a debt collection agency.
Its all about the detail
A solicitors letter comes with a lot of benefits. One of the main ones is that solicitors have a wide range of knowledge on regulations and legal occurrences when chasing a debt. This is particularly beneficial to businesses as it helps to maintain reputation - nobody wants a backlash from their clients from their debt collection practices. A letter from a solicitor can be just as quick and cost effective as more traditional debt collection methods, but will additionally provide a more formal and sincere way of requesting payment before legal action is escalated.
It provides more options
Once a Letter Before Action (LBA) has been sent by a solicitor, it opens up the door to a number of future options. By authorizing a solicitor to send the letter, you are letting the debtor know that you are serious about taking the matter further, should you be required to do so.
On average, 86% of the cases we handle at Lovetts are dealt with at the Letter Before Action stage. However, if you do send an LBA to your debtor and do not receive a satisfactory response, then the next stage in the legal process is to issue legal proceedings through the County Court. A County Court Judgment (CCJ) is a court order that confirms that the debtor has defaulted on payment. Once a CCJ has been obtained, it is then possible to 'enforce' that debt immediately by instructing a Bailiff or High Court Enforcement Officer.
Heres a short video explaining the process of a Solicitors Letter
Using a debt recovery solicitor in this case will help prevent any potential backlash as they will always advise on the most appropriate method of enforcement based on their experience and expertise with similar cases. If a case were to be disputed, having access to legal advice would be hugely beneficial as this will help you to set strategy and implement next steps in the proper way.
It sounds more sincere
There is nothing worse than receiving a letter from a debt collection agency. Many charities have been taking action against the predatory actions of some debt collection practices and this makes businesses more reluctant to use a traditional debt collection service to pursue their debts. However, when instructing a solicitor to send a letter, you know you are dealing with a professional legal sector entity. The written format itself will generally be more sincere, and instructions will allow the debtor time to fully assess and respond to the situation at hand before legal action is taken. This benefits your business and greatly assists in preserving the business relationship with the client in question.
Looking to send a Solicitors letter to a debtor? Download our free LBA template to get you started on how your Letter Before Action will look like to the debtor.