How Is Debt Collection Different From Debt Recovery?

Businesses seeking services related to debt collection are often confused between two terms – debt collection and debt recovery in Sydney. A fact about both these terms is that they can be used interchangeably, as they both are associated with collecting unpaid debts, clearing pending invoices and getting unpaid dues cleared. However, the process is different in collection and recovery, and according to the experts, the term "collection" is used when a company seeks late payments from clients. On the other hand, the term' recovery' is used when a company approaches debt recovery contractors for help in debt recovery.

Associated with collecting unpaid debts - Ampac

UNDERSTANDING DEBT COLLECTION

As mentioned above, the debt collection process involves the lender or the company asking its clients and customers to clear outstanding bills and unpaid debts. They can contact the debtors via emails, letters, and phone calls to remind them about the money you owe.

WHAT IS DEBT RECOVERY IN SYDNEY?

As a part of debt collection, the company will repeatedly contact you to clear the outstanding dues. But if all their efforts remain unanswered, they are compelled to seek services from debt recovery contractors. This process is called debt recovery in Sydney, where third-party service providers engage in debt recovery and for this, they use a systematic approach.

This approach will involve recording the communication with the consumer and then, they contact the debtors to verify and identify their position on debt repayment. They also establish suitable payment arrangements and ensure that there are no issues in terms of payment.

Establish suitable payment arrangements - Ampac

HOW ARE DEBT COLLECTION AND DEBT RECOVERY IN SYDNEY DIFFERENT?

The aim is the same: recovering overdue payments and uncleared debts. However, as mentioned above, these processes are different, and here are the details.

PROFESSIONAL INVOLVEMENT

Debt recovery in Sydney is more effective, as debt recovery contractors are involved. This is completely contrary to debt collection, where the in-house accounts team or in-house debt collection team contacts and negotiates with the debtor and figures out the payment process. When these things don't work, the company is forced to seek debt recovery Sydney services, where third-party specialists and experts engage in the debt recovery process and initiate legal proceedings if their efforts go unanswered.

Debtor and figures out the payment process - Ampac

TYPES OF DEBTS THAT COMPANIES CAN RECOVER DURING THE COLLECTION OR RECOVERY

Here are a few types of debt that qualify for debt recovery and collection:

  • Personal loans
  • Credit card balances
  • Auto loans
  • Government, law enforcement and court fees and fines
  • Medical bills
  • Bank fees and overdrafts
  • Utility bills
  • Student loans

 

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