Debt collection can be considered as one of the most difficult jobs a person can do. Why? Not only because debtors need the money for urgent, personal uses, but for various other reasons which delay payment. This goes for individuals as well as for companies.
Most of these reasons are well-worn and just as well-rehearsed, though some of them may be perfectly true but nonetheless hard to accept. But there remain debtors who borrow huge sums of money without the least intention of repaying them.
Collection becomes even more difficult when the debtor is a family member—lenders in such cases are often diffident due to the relationship involved. Awareness of the debtor’s financial difficulties, or a debtor’s private reasons for non-payment likewise make collection a difficult undertaking.
Debt Collection is a Global Practice
Debt collection companies are keen observers of debtor tendencies and have based their collection methods and practices accordingly. The methods for collecting debts differ between countries as they do between debt collection firms, with varying degrees of efficacy.
In the Canada, the debt collection period depends on the province; debtors in Alberta or Ontario have only 2 years to pay while those in other provinces have a payment period of up to 6 years. Authorized collection professionals likewise vary according to province: debts may be recovered by a collection agency or anyone who possesses legal authority. Moreover, Canada’s credit bureaus keep credit files for 6-7 years, depending on the province, the debt and eventual collection.
In the United Kingdom, the Financial Conduct Authority (FCA) regulates licensed debt collection agencies. The FCA has a long list of guidelines for debt collecting agencies, which are not laws but have counterparts in certain legal areas.
In the United States, the Federal Trade Commission acts as the head of all collection agencies. Consumer Financial Protection has regulatory power over collection agencies, as well.
Debt collection is much simpler in Spain: If talking to the debtor proves ineffective, the creditor can then write a letter to the debtor containing everything about the debt. Both parties may still undergo legal processes provided the details in the letter remain legitimate.
Settling Debts in Singapore
Debt collection in Singapore does not have a set legal process for the simple reason of the city-state having a great payment culture. As late payments are barely registered, Singapore has a great DSO (Days Sales Outstanding).
In fact, until recently, the only existing law relating to unpaid debts was the Insolvency Law, which covers companies who are behind on their payments. In such cases, it is also important to first determine whether the debtor company has begun an insolvency procedure—once insolvency proceedings have started, a lender will not be able to recover his debt.
Singapore’s Parliament has only just approved the Companies (Amendment) Bill 2017 to improve corporate debt restructuring in the country. The Act is considered revolutionary, and a portent of the city-state’s potential to become an international debt restructuring hub.
For resolving domestic debt issues, however, settling the debt amicably is actually the first option debt collectors look at. An attempt at this is made by first sending the debtor a dunning letter—should the debtor fail to reply, a debt collector might visit him in an attempt to negotiate.
But what makes debt collection in Singapore a bit different from that in other countries, is that the process depends on the amount of money owed. A petition may be filed at the Small Claims Tribunal against debtors who owe below S$10,000. Should the time come, debt recovery proceedings may be held at the State Courts, which include the Magistrate Court and the District Court. The Magistrate Court handles cases with debts that do not exceed S$60,000, while the District Court is in charge of cases involving debts between S$60,000 and S$250,000.
The Supreme Court, consisting of the High Court and the Court of Appeals, handles cases involving amounts that exceed S$250,000.
That said, the first step would be to send a demand to the debtor requesting payment of the amount owed together with interest. The debtor will have 8-14 days to respond by filing a defense. The court then examines both sides and will make a decision.
Look to the Guru
So, how does Debt Collection Guru help you? Simple! At Debt Collection Guru, we always look closely at each debtor’s assets to find a way for debtors to pay what they owe, choosing methods according to whether the debtor is an individual or a company.
Our strong lineup of professional legal experts will help you, in every possible way, to collect on your debts. We do our best to seek justice and give you back what is owed with the appropriate interest through a proper debt collection process.
Let us help you with your debt collection dilemma. Contact us now.