Debt Collection is a process of collecting the unpaid debts. These debts can be in different forms like Unpaid Salaries, Unpaid Invoices, Unpaid Purchase Orders, Unpaid Investment Capitals, Unpaid Capitals, Unpaid Dividends, Unpaid Shares or even the profits. Unpaid Rents, Unpaid Services can also be taken by these Recovery Agencies as Debt Collection. Dubai observes few world’s Best Law firms offering world class legal and Debt Collection Services. For example Ask The Law – Al Shaiba Advocates and Legal Consultants. Though this Law Firm only operates in Dubai, but having good terms and association with different Law Firms, from all over the world. Such Law Firms are unique because of having, well established structure, well established legal entity, a well-trained team, professional setup and a passion to serve community. Therefore Debt Collection Dubai services are quite result driven and considered important.
If you fail to repay your debt, the collection agency or Law Firm may retain an attorney to file a lawsuit against you. The core duty of a collection firm to recover the debts, without stepping inside the Court. But a Collection Agency cum Law Firm’s next course of action is Court Case or the litigation. Such Court Cases are called as Civil Cases or sometimes Commercial Cases as well. You will receive a notice or notification and court date from the court system. If you fail to appear, you will lose by default and be legally obligated to pay. When you do appear in court, the judge hears arguments from both you and the collector. They will then issue a judgment and determine whether you must repay the Debt.
If you lose, you will likely be required to repay not only your debt, but also attorney fees, Debt Collection Dubai costs, and interest. To recover the amount you owe, your collector may garnish your wages or place a lien on your property. However, Debt Collection has been always the most demanding but cost effective services. Therefore even if a little cost has to be paid at the beginning then it will not produce a significant difference because, the produced results will be greater in utility. Just the balance fee is paid when amount is recovered. No-Win No-Fee was used to be the popular fee structure before, but now Law Firms or Recovery Agencies are also charging little upfront as processing fee, which is not bad at all.
How will defaulting on my debt affect my credit score?
Typically, when a credit account is sent to collections, a person’s credit score decreases. How much you pay depends on how high your credit score was to begin with. Even if you paid the collector, the collection account used to stay on your credit report for seven years. However, you can now improve it by eliminating your debts. FICO 9, the most commonly used credit scoring model, deprioritizes paid collection accounts. So paying a collection account can still improve your credit score.
When will a collection agency contact me?
Regarding overdue debts and Debt Collection Dubai, each creditor has a unique policy. However, if you are late on a payment, you will not typically hear from a debt collector immediately. Your provider may instead contact you via phone, email, or mail to remind you of the debt and request payment.
If you have not responded or made a payment, your provider may refer your account to a debt collector. This could be the case if a payment is overdue by more than 30 days. But it occurs more frequently when your account is charged off after 180 days of nonpayment.