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Formal Debt Collection Method

Formal Debt Collection Method

The process of debt recovery follows a systematic plan of action. Professional and well-experienced debt recovery agencies or service providers design a recovery pattern that follows a progressive fashion. It begins by implementing the least aggressive procurement tactic like sending collection letters to the debtor party on behalf of the credit-issuing company. It acts as a reminder for the indebted clients to make a practical move towards honouring their financial obligations. If the client realizes his legal and ethical duty to settle his debt on time, such collection letters are enough to propel them to pay their pending bills. Debt Collection in Dubai is usually performed by professional third-party service providers called Debt Collection Agencies or debt collection departments of independent Law Firms.

Initially legal notices, general notices etc are served to the debtor. It is served to owner, hr, accounts and other senior management. However, if the collection agencies observe no positive response from the debtors even after receiving these collection letters, they move towards the next strategy formulated in the recovery plan. Personal visits are paid by the debt collectors to persuade the debtor to settle their outstanding dues on time. A pressure tactic strategy is used but not in the sense to threaten the people. Pressure tactic strategy is used positively where an influence is used in order to explain to the debtor that further consequences can be very much serious.

If the person or party to whom the debt was issued, still fails to budge then it becomes necessary for the legal bodies or formal courts to intervene. The collection agencies encourage and guide their credit-issuing client to opt for professional legal action against the defaulting debtor. It occurs when the debt collectors have exhausted all their basic and aggressive tactics for debt recovery.

It then falls in the jurisdictions of the legal system prevalent in the UAE to come to the assistance of the creditor to help him get his original claimed amount back from the defaulting party along with a penalty or compensation. People generally tend to avoid facing legal consequences. Therefore, in a majority of the cases, debt collectors are successful in getting the outstanding bills paid from the debtor party via various ingenious procurement tactics and professional recovery skills. Debt collection done through professional agents or agencies has proved to be a very cost-effective method for companies due to several reasons. Firstly, it helps the credit-issuing company to focus its attention on more pressing business matters. They let the outsourced professionals take care of the side scenarios of debt recovery. Secondly, the company gets its hands on a well-formulated track record of the debtor profile, and their payment and defaulting instances. It proves to be of great use for future business planning. 

The Last Phase:

Civil or Commercial Cases are filled at last. A mediation process by the Collection Agency or the Law Firm is also proved as proof where the court admires this mediation process and saves the tome of the court. Civil Court with three phases, save the creditor. First to second or second to the third court, can extend the time only but it does not mean that the final judgement will be vain. Civil Court also brings the legal expense back with legal reward. Apart from that, some sanctions can also be imposed on the debtor if he is found guilty of his wrong and blackmailing behaviour.

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