Consumer Debt Recovery

consumer debt collection

consumer debt collection

Consumer debts are personal debts that derive from the purchases of household goods or consumptions. Examples that come under our consumer debt recovery service are utility debts, student loans, vehicle loans and phone contracts, in fact any type of debt that has been incurred by a consumer owed to a business – it could be dental fees or veterinary fees. LRC deal with a large range of consumer debts from a variety of different industries and collect both non-Consumer Credit Act (CCA) regulated debt and CCA regulated debt, provided there is a prospect of litigation.

Pre-legal Collections Strategy

Choose your consumer debt recovery strategy

Most consumer debts go through our pre-legal collection’s strategy. You can choose from our standard consumer collections strategy, or we can create a bespoke strategy together. This process allows us to try and resolve any disputes or complaints the customer may have if payment of the debt is not forthcoming.

All consumer debts are data cleansed before communications commence. The pre-legal collections strategy comprises of data cleansing, letters, emails, calls and SMS texts which are spread over a 30-day period. Payment can be made in a variety of different ways including direct debit, over the phone or via a 24/7 automated payment line. All of our collection letters have a unique bar-code to enable payment to be made at any Paypoint outlets.

We can arrange repayment plans once the customer completes and returns a Personal Financial Statements (PFS) to us. Once received, we assess what amount is sustainable for your customer. Payment arrangement plans are reviewed after 6 months.

Letter Before Claim - Debt Recovery

Debt Recovery Pre-Action Protocol (2017)

Under the Debt Recovery Pre-Action Protocol (2017), a Letter Before Claim (LBC) must be sent to the debtor before Court action can commence which gives them a mandatory 30 days to respond. The LBC must include an information form, reply form and detailed income and expenditure form. The Pre-Action Protocol does not apply to commercial cases.

Claim Form

Claim form for consumer debt recovery

We use the quicker Claims Productions Centre to issue claims through the County Court. We can handle any of your defended matters up to and including a final hearing. The work is supervised by Rachael Ward, our COLP lawyer (Compliance Officer for Legal Practice).

Judgment

Enforcement methods of consumer debt recovery

Once Judgment is obtained and if no payment has been received there are several enforcement methods to be considered and a number of reports which we can obtain to help us identify which enforcement method is appropriate. We will advise you on a case-by-case basis given the circumstances of the matter.

Enforcement

Types of enforcement

If a debtor fails to pay following the entry of Judgment, then there are a number of options to consider enforcing your Judgment:-

  • High Court Enforcement Agents – Personnel who are instructed under a Writ of Control to attend at a debtor’s property for the purposes of obtaining full payment of the Judgment debt. Enforcement officers are entitled to seize goods to the value of the debt to be sold at auction to satisfy the Judgment.
  • Attachment of Earnings Applications – An attachment of earnings application is made to the Court for the debtor to provide information as to income and expenditure for the Court to assess a fair and reasonable payment arrangement. If the debtor fails to provide the information the Court will contact the debtor’s employer direct and make an order that monies are deducted from the debtor’s salary each week or month.
  • Charging Order Applications Order – A Charging Order secures the Judgment debt against any property owned by the debtor. The Charging Order will often remain in place until such time as the debtor’s property is sold or remortgaged. In some circumstances, the creditor can force a sale of the property once a Charging Order has been obtained.

Insolvency

Statutory demands, bankruptcy petitions and winding-up petitions

Legal Recoveries & Collections Ltd. can assist you with insolvency, the inability to repay a debt, and issues surrounding it. The actions we take include:

  • Statutory Demands – This is a formal legal demand for payment and failure to make payment, raise a formal dispute or make contact could lead to a Bankruptcy Petition being issued as it’s often the pre-cursor to insolvency action.
  • Bankruptcy Petitions – A bankruptcy petition is presented to the court, allowing a debtor’s assets to be seized and sold to pay off any outstanding debts. Applying for this petition can be difficult, but LRC Ltd. makes the process as simple as possible for you.
  • Winding-Up Petitions –Following the issue and service of a Winding Up Petition a company can be forced into compulsory liquidation. The assets of this company will be distributed to the creditor before the business is dissolved.

Tracing Reports

Reports that help in debt recovery

Depending on the circumstances there are several reports which we can obtain to help us determine the best way forward to successfully recover money for you. The reports could be for home address and employment tracing.

We offer our Insight report which identifies any County Court Judgments, credit applications made and checks residency. Office Copy Entries can also be obtained to see if your customer is a property owner. All of this can be valuable information which will help with the decision-making process as to whether litigation (court action) may be appropriate.

Mini or full Asset Trace Report

For high debt value cases

These are particularly helpful for high debt value cases, and they can establish a sole-trader’s whereabouts. The reports can be obtained at any point in the debt recovery cycle. They show whether taking court action is appropriate and cost effective and will help us to make recommendations to you on how to proceed. They can also be used at the post judgment stage to help determine which enforcement method is appropriate to use.

Through our experience of working together with organisations we will:

  • Save you time and valuable resources in the collection of money owed.
  • Devise strategies to maximise recovery of your debts.
  • Provide you with continued support. advice and assistance throughout the debt recovery process.
  • Ensure that your reputation is always protected by always acting in a professional, compliant, and ethical manner.
  • Provide you with Debt Manager access to enable you to keep updated as to the progress of your cases.
Get in touch

If you have been contacted by us please click here
If you are a business and would like to know more about how we can help you please complete the short form below and we will get back to you as soon as possible.

Featured Customer Reviews

International Credit Insurance Client

We have been utilising the legal review services of Legal Recoveries and Collections (LRC) for the past few years, and we couldn’t be more satisfied. Their reviews are consistently thorough and informative, becoming an essential part of our pre-legal processes. This has significantly helped improve our recovery rates and reduced overall legal costs. The team at LRC are also very easy to work with and always available to provide professional advice when needed. We highly recommend their services.

North East Ambulance Service

As an NHS ambulance Trust, we don’t have in-house debt collection specialists, so find it difficult to pursue monies outstanding once our usual follow up process runs its course. LRC was recommended to us by another local NHS Trust and we approached them to find out what they could offer. We have been using LRC for nearly 3 years now and have not been disappointed. Our collection rate is circa 70% which represents a significant sum of money that is coming back into the NHS for patient care.

The team are very knowledgeable on the best route to recovery but will also advise when its just not financially viable to pursue a debt any longer. We have regular updates and meetings with Andrea the client services manager so everything is kept on track. It’s always our decision but LRC give us the best tools to make the right one.

London Metropolitan University

We have worked with Legal Recoveries and Collections for a number of years now and they have provided an outstanding service to us. We have worked closely with the team and have a good working relationship with both Rachel and Andrea. Their online portal is very user friendly. They have collected both pre-legal and post legal debts for us to a high standard and we would recommend their services to anyone considering using them going forward.

Utilita Energy Limited

We contacted LRC when we wanted to strengthen our collections processes and recover debt after we had exhausted our internal processes attempting to collect. From the off, LRC offered exceptional advice and support and helped us shape the way in which we approach collections. The team at LRC have a wealth of knowledge and experience which has enabled them to collect a significant amount of money on our behalf and through their professional approach have helped to change customer behaviour in many cases from infrequent to regular payers. LRC have tailored their collections activities to meet our needs and regularly make suggestions to make sure we spend our money wisely to ensure maximum return from their services . We are currently working with LRC to create a bespoke training package that they will deliver to staff across the business who manage and recover debt. I would not hesitate to recommend LRC for debt recovery.

James Paget University Hospitals

We have worked with LRC for about 9 years now and throughout this time they have provided us with good customer service and are always prepared to go that extra mile. Their recent gaining of ‘law firm’ status enables them to now handle the entire debt recovery process for us from pre-legal collections, through to legal proceedings and enforcement therefore ensuring continuity.

E.ON Energy Solutions

LRC have been an excellent organisation to work with. They aspire and deliver to a partnership principle rather than a transactional relationship and as such have helped to unlock our strategic deliverables. They really are prepared to give added value in these times of economic stress.

Consumer Debt Recovery FAQs

Q. Are all consumer debts worth pursuing?

A. You need to weigh up whether the expenses and energy spent in recovering the debt is justified by the amount you are owed. Sometimes, it might be financially reasonable to write off small debts, however this could set a precedent for the future. Always investigate why you have not been paid; for example, if your customer is unhappy with the service they’ve received, you might want to rectify that first. If you are still unsure whether your consumer debt is worth pursuing, speak to a member of our team for advice.

Before commencing Court action, it is always worthwhile trying to gather as much information as possible about your customer to enable you to make an informed decision. Important information that may assist and that can be obtained include obtaining details as to the customer’s employment status and, if they are employed, the employer’s details. Other information that is useful to find out includes whether the customer is a homeowner and an insolvency check and credit check.

Q. How do I recover debts without alienating customers?

A. Take a diplomatic but firm approach. Discuss the situation with your customer and try to resolve any problems so that you can reach an agreement. You want to offer great customer service but remember that you are a business and customers who refuse to pay are not valuable customers. Explain what steps you intend to take to recover the debt, letting the customer know before you start any legal proceedings. Most customers pay after receiving a Letter Before Action (LBA) from us demanding payment within 14 days.

Q. Should I be prepared to compromise with customers on overdue debts?

A. If a customer cannot pay, there is no point in demanding immediate payment in full. Negotiating part payment and rescheduling the debt – confirmed in writing – can at least help you recover some of the money you are owed. This approach also improves the chances of maintaining a good relationship if the customer’s problems are only temporary.

Q. If I start the legal process with a letter am I committed to further actions?

A. Definitely not. Starting a legal process does not commit you to follow through all the available steps and you can choose to stop chasing a debt at any time. You remain in control, and you’ll be always kept up to date with the progress of your case.

Q. What evidence do I need to begin the consumer debt recovery process?

A. Ideally you will have a written and signed contract; or if you sell goods, you may have other documentary evidence such as a purchase order. You’ll need evidence that you delivered the goods/service and fulfilled your side of the bargain. It also helps if there is clear evidence that you made the customer aware of your terms and conditions before the contract was agreed. If you are unsure on this, speak to a member of our team to discuss the quality of your evidence.

Q. Can I charge interest on any overdue consumer debts?

A. You can claim “contractual” interest if your terms of business set out a set rate of interest claimable should payment of invoices not be made. Alternatively, at the point that Court action is issued “statutory” interest can be claimed from the date the invoices fell due for payment – this statutory rate of interest is currently 8%.

If your customer has cash flow problems, it may be worthwhile negotiating a compromise with part-payment and a rescheduling of the debt. This will help you to maintain your relationship with the customer whilst also ensuring you get paid. If this fails and you must pursue a legal claim, it at least shows that you have attempted to resolve the situation fairly.

Get in Touch with Us

If you have any questions about our service or would like to discuss your matters with us in greater detail, please contact the Business Development Team on 0330 024 6342