debt collection service

The term debt collection service refers to the actions that a company, lawyer or debt collection agency can help you with in debt collection.

Debt collection - and therefore debt collection services - vary from debt collection agency to debt collection agency. As a result, it's rare that debt collection agencies or debt collection lawyers handle cases in exactly the same way.

As a customer and creditor, you often have the opportunity to define how your debt collection process should proceed. A debt collection service can therefore be either a lengthy process with many actions and touchpoints with the debtor - or a short and efficient process.

Many debt collection services can also be supplemented with an initial reminder process where the lawyer or debt collection company is responsible for sending out reminder letters etc.

Who is allowed to perform debt collection services in Denmark?

In Denmark, three entities are allowed to perform debt collection services: a lawyer, a debt collection agency or the creditor themselves. If a creditor chooses to handle the debt collection process themselves, it is often called self-collectionwhile debt collection carried out by a third party is called third-party debt collection.

In order to perform third-party debt collection, an authorization from the police is required. In Denmark, there are around 100 authorized debt collection companies that are allowed to offer debt collection services.

All licensed lawyers are allowed to perform debt collection in Denmark. Thus, lawyers do not need an authorization from the police like debt collection companies do. However, it's worth noting that not all lawyers offer debt collection services, as many specialize in other legal areas.

What does a debt collection service include?

No two debt collection services are the same - it's up to each lawyer or debt collection company to define how they want to execute their debt collection product and service.

In addition, many customers can also influence the debt collection process - including the pace and scope of the actions to be taken.

A typical debt collection service may include the following elements:

Reminder letters
Imposition of statutory interest and fees
Calling the debtor
Attendance at the debtor's premises
Establishing installment plans
Registration in debt registers
Legal actions, such as attachment of assets and real estate

You can read more about our debt collection service at Collectia.dk.

What can debt collection services do for my business?

An effective debt collection service can help recover unpaid invoices from customers who should have paid in the first place.

Through rigorous processes, structured workflows and persistent effort, skilled debt collection agencies and lawyers can help you recover all or part of your outstanding debt.

In some cases, it only takes a few contacts with the debtor to secure payment, while in other cases it may be impossible to recover the amount - for example, in the event of the debtor's bankruptcy, death or similar circumstances.

While a debt collection service can't always guarantee payment, a dedicated debt collection team can help recover a large portion of the debt. The purpose of a debt collection service with a debt collection agency or lawyer is to outsource the debt collection process so that the creditor does not have to spend time and resources collecting the debt themselves.

An efficient debt collection service can relieve your business of manual case management, follow-up and contact with debtors, allowing you to focus on your core business.