We tell you all about it in the blog below.
A no cure no pay collection agency; what exactly does that mean? And who pays the collection fees when you hire a collection agency? We tell you all about it in the blog below.
What is a no cure no pay collection agency
In a no cure no pay collection, the debtor pays the costs of the collection agency. You as the creditor do not pay these costs. You also do not have to advance the costs for the collection process.
How does a no cure no pay collection agency work
A debtor's bill is not paid. Or the direct debit for the rent of a house cannot be executed. You may have already sent a reminder or demanded payment but payment is still not forthcoming.
Time to call in a collection agency (Dutch: incassobureau). Preferably free of charge, without payment in advance. So not like a collection lawyer, who sends an invoice per hour. So choose a no cure no pay collection agency.
Does a debtor have to pay the collection fees
Yes. The debtor is legally obliged to pay all collection costs, even if you hire a no cure no pay collection agency. It is important, however, that the collection process follows the correct rules. It is therefore advisable to outsource a collection to a (free) collection agency.
What if the debtor fails to pay
In just under 10% of cases, it happens that a debtor refuses to pay the outstanding invoice or the overdue rent. The no cure no pay invoice and collection costs then remain outstanding.
- In that case, the collection agency discusses the possibilities of filing a lawsuit with the creditor. In a lawsuit we ask for a ruling from the judge.
- If a judge determines that the debtor must indeed pay, then he or she will be obliged to do so.
- Does the debtor refuse to do so? Then, in an extreme situation, a bailiff may be called in to seize the debtor's bank account, assets and belongings, for example.
Usual procedure
- The creditor engages the agency
- The agency sends the debtor a reminder / demand for payment and/or notice of default. We also send text messages and / or WhatsApp. And the agency calls the debtor several times.
- In more than 90%, this amicable collection results in payment by the debtor.
- A debtor pays the outstanding invoice amount plus collection costs through the third-party account.
- The creditor receives the invoice amount via the third-party account. This invoice amount is also supplemented with the statutory or agreed interest for the period that the debt has been outstanding.
- The collection costs are paid by the debtor. These collection costs constitute the fee for the no cure no pay collection work of the agency.
We hope to have informed you well with this blog about no cure no pay collectors agencies. This way you know what to do when you hire a collection agency (Dutch: incassobureau inschakelen) Good luck!
Tatiana is the news coordinator for TravelDailyNews Media Network (traveldailynews.gr, traveldailynews.com and traveldailynews.asia). Her role includes monitoring the hundreds of news sources of TravelDailyNews Media Network and skimming the most important according to our strategy.
She holds a Bachelor's degree in Communication & Mass Media from Panteion University of Political & Social Studies of Athens and she has been editor and editor-in-chief in various economic magazines and newspapers.
