Skip to main content
The ups and downs of the debt collection industry in 2022 - The choice between debt collection company or debt collection lawyer - Collectia
Sebastian S.

The ups and downs of the debt collection industry in 2022: the choice between a debt collection agency or a debt collection lawyer

Thousands of Danish companies use debt collection. Some companies use self-collection, where the company handles debt collection itself, or through third-party debt collection, where debt collection is handled by an authorized debt collection company. Others use a lawyer specializing in debt collection - often referred to as a debt collection lawyer.

But what should you choose in 2022: debt collection lawyer or debt collection company?

In this article, we focus on the differences between debt collection agencies and debt collection lawyers. We promise to be as objective as possible, despite being a debt collection agency ourselves.

Debt collection lawyers

A debt collection lawyer is a lawyer who deals with debt collection. Basically, all lawyers are allowed to engage in debt collection, and in fact no debt collection authorization is required. A lawyer just needs to have their lawyer's license. Once they have this, they can engage in debt collection on behalf of others; private individuals or companies.

Therefore, first of all, you need to find out whether your lawyer is actually allowed (and willing) to deal with debt collection. Because not all lawyers are willing to do so. According to the lawyer key, only 65 law firms in Denmark have chosen to show that they are involved in debt collection.

That said, lawyers are often good at complex, legally heavy and perhaps convoluted cases that may not even start as a debt collection case. It might start as a civil action, a criminal case or something else entirely.

If your business already uses a skilled lawyer who is willing and able to help you with debt collection, it can also be an advantage to choose a lawyer who already knows your business.

If your lawyer does not specialize in debt collection, and thus does not have effective systems and processes for handling debt collection, you should be aware that it is often a secretarial task to manage the debt collection process; and thus not your lawyer who is in charge of the task. This does not necessarily have to be a disadvantage, but you should just be aware that debt collection is often "another product" of the lawyer.

The price at the law firm is (often) significantly higher than at a debt collection agency, as in many cases the lawyer has an hourly rate for his cases.

In our experience, there are more lawyers than debt collection agencies handling debt collection for private individuals. In fact, we do not know of any debt collection agencies serving private individuals.

The debt collection company

A debt collection company is a company that is authorized by the National Police to handle debt collection on behalf of others. As of mid-2022, there are more than 120 debt collection companies in Denmark that are legally allowed to help your company with debt collection. However, as with debt collection lawyers, far from all of them will necessarily help you and your company with your bad payers.

Many debt collection agencies often require their customers to deliver a certain amount of debt collection cases in a year. If you don't have enough cases, you may have to find another debt collection company - or perhaps a debt collection lawyer - to solve your cases. But if you find a debt collection company that will help you, you will often find that, unlike most lawyers, they can offer no cure no pay. This (often) means that you will experience a cheaper case process, as debt collection companies live off the interest and fees charged to the debtor. You get all or part of your principal.

Unlike lawyers, debt collection companies typically do nothing more than debt collection. This means you often get a different effect, more streamlined processes and typically online access to your cases - something very few lawyers offer.

Data is also important to mention! Often the debt collection company has a much larger data base and has handled many more cases over time than the lawyer. Data makes the debt collection company wiser about what works best in the recovery process. Knowledge that benefits you.

Is there anything a debt collection agency is less good at? Yes, of course! Few debt collection agencies are good at legally complex cases that may not start as a real debt collection case or where the parties do not agree on the claim.

Fortunately, most debt collection companies have skilled lawyers or legal experts on staff - so that the case can be brought to a successful conclusion.

Most debt collection companies can therefore offer the best of both worlds: low prices, efficient procedures - and the possibility of legal backup if needed.

Court of bailiffs

Both lawyers and debt collection companies are allowed to send your debt collection cases to the enforcement court. There is no difference between the two.

Interest and fees

Lawyers and debt collection agencies may charge the same interest and fees - there is no difference. See the applicable debt collection costs and fees here.

The price of debt collection

The price of debt collection by a lawyer or a debt collection agency can vary widely. Typically, lawyers charge on a fixed price basis - while (many) debt collection agencies charge on a no cure no pay system - where they live off the fees charged. You should check carefully before choosing.

Overview of your case

Most debt collection companies nowadays offer online access so that you can follow your cases. Unfortunately, this is a service that very few lawyers offer.

Do your research before you choose; it is often a great advantage to be able to follow, communicate and conclude your cases online.

What should I choose?

Whether you choose a debt collection agency or a lawyer is up to you, but be aware that debt collection agencies are often specialists in their field. Very few lawyers are exclusively involved in debt collection. If you want to use a lawyer, we recommend that you choose one with many years of specialized experience in the field.

In addition, we also think that you should choose a provider that can offer you online access to your cases; to be able to follow the process, what is happening on your cases and the communication.

Collectia - 150 years of experience as a debt collection company

Collectia A/S has more than 150 years of experience in debt collection, and every day we develop new solutions for our clients and their customers. We follow the digital development and make use of the latest digital solutions. This makes the debt collection process easier for both debtor and creditor. This helps to make us one of Denmark's most efficient debt collection companies.

Free material

Subscribe to the newsletter

Latest posts