Debt collection brings to you the opportunity to knock your debtor’s doors to repay the loan.
It involves a lot of legal formalities and documentation.
Debt collection companies in the USA are always there to guide you through the process of debt collection whether the debtor is in a local province or international area.
If you are looking to get back your debt then you must be surrounded by clouds of confusion. So partnering with the European debt collection company makes the process easier and straightforward.
Here are the most frequently asked questions about debt collection in France and what you must do if you encounter such a situation to save your business from the sin of blocked funds.
- What payments are considered late?
The payment which has not been made after 30 days of being invoiced then it is considered late. There is a period of 60 days for business transactions to become due.
For many businesses to start the credit period from the date of the invoice sent, concluding at the end of the following month. You can have different terms for your credit and the payment becomes late only after the expiry of this credit period.
To avoid confusions you must send reminders to your debtor to repay the loan 7 days prior to the due date. Once the payment has not been made it’s important that you remind your debtor for the payment or set in a new procedure to recover the payment as soon as possible.
2. How should you charge interest on late payments?
If you want to charge interest on the late payments then you must make your debtors aware of it. You must do this in writing and add the rate of interest in the terms and conditions.
You can set the rate of interest according to the statutory rate that is the base rate + 8% or you can have a contractual rate of interest for your agreements. In case it is totally up to you.
3. What should you do if the debtor changes his last known address?
If data is not reachable or you cannot contact the debtor through different ways like telephone, letters, emails. If you get a no reply then a debt collection company would help you out in this case.
A debt collection company discovers the debtors and issues a solicitor specialist Letter Before Action(LBA). once the debtor is located and communicated with the debt collection company resumes its process of recovering the dues.
4. How will you be paid?
You will be paid according to the payment proposal. Your debt collection France partner proposes a settlement plan. If you settle for full payment including the cost and interest this is the best for your company because you get the largest possible amount.
The debt collection company charges a large percentage of the funds recovered. When the debtor agrees to settle but not in full, this is known as the disputed payment.