Debt Recovery or Debt Collection might seem to be interchangeably-used terms to represent the same concept. There is no difference between these two terms. Therefore these are suggested as Debt Collection Dubai or Debt Recovery Dubai for Recovery Process in Dubai as well. Debt Collection or Debt Recovery refers to the efforts made by the creditor to reclaim the amount issued by him as debt to the debtor for a considerable time. The creditor might be an individual or some company. All the in-house attempts made for getting back the debt amount come in the category of debt collection. This strive for collecting the with-held amount is the responsibility of an employee or a designated department within the organization. First Party Collection is given the name to such attempts. When it is shifted to a third party then the process is called as Third Party Debt Collection Agency. However, Third Party Debt Collection Services by Emirati Law Firms in Dubai are considered the most valuable services
Debt Collection or Debt Recovery is a concept that refers to the reimbursement of loan amounts by the efforts of a third party that is hired by the crediting company or individual. Debt recovery becomes mandatory when the debtor fails to honor his financial liabilities, and the payment keeps on getting delayed. Moreover, the debtor fails to oblige in response to the collection attempts made by the debt issuer.
Debt Recovery: The Essential Element:
Debt recovery is an essential element regarding the sustenance of any business. A high rate of account receivables indicates a low liquidity rate of any company. Low cash generation becomes a threatening condition for any business cycle. Therefore, sole proprietors, firms, and corporations tend to avoid this red zone in their business operations that might cost them their business in its entirety. This red zone tends to push the company towards bankruptcy. It means the end of the company’s business life.
Vice versa, if you are the debtor and your balance sheet shows an increased rate of account payables compared to account receivables, then your business conditions are in a critical state. An unpaid loan that goes beyond the stipulated time makes you a debt defaulter. It scars your position in the corporate world, costs you your clients, and ultimately your business operation.
In such scenarios, collecting agents make rigorous attempts to get back the amounts due on behalf of the original crediting issuing company. They find out whether you are a habitual defaulter or are doing so due to some impediments. However, even if the case falls in the latter category, they still plan out strategies to get the maximum amounts recovered. Their contingent-based fee is the stimuli behind it.
Debt Collection or Recovery Procedures:
The debt recovery/collection procedure follows a systematic pattern like the process of debt issuance. It initiates when the debtor fails to make the loan payments on time. The due date is the time given by the credit-issuing company or individual to the debtor. He is to clear off all his financial liabilities by the stipulated period. If the loan amount goes beyond maturity and is still left unpaid, then the creditor starts making recovery attempts.
The payment reminders are via phone calls, emails, or personal visits of designated people of the crediting issuing company or institution. It might also include an invoice that shows the late payment charges as retribution for the failure to honor the financial obligations timely. However, if these in-house efforts made by the creditor fail to show any substantial results, he is left with no choice. Drastic strategies are formulated and purpose-oriented tactics of debt recoveryare considered for getting back the pending debt bills.
These forceful attempts of recovering the unpaid amounts may include handing over the case to the specifically-designated department within the organization which is responsible for planning strategies and devising action plans for persuading the debtor to pay the amounts due. Likewise, the company may consider involving a third party i.e. debt collection agencies after exhausting all inter-organization efforts for debt procurement.
Renowned Debt Collectors have the necessary expertise in this field of recovering bad debt. They work out result-oriented schemes and adopt winsome funds retrieval approaches to get the maximum loan amount recovered on behalf of their creditor client. These collection agencies are neither linked nor do they work under the crediting company. Their services are outsourced by the loan issuer to get expert intervention for settling their unpaid loan amounts.
