The answer is “that depends”.
Most debtors will pay after receiving the first letter that we send. We accept debts as little as $100. That would mean you recover $65.00 if the debtor pays but you cannot add cost. In most cases costs can be added, so you get the full $100.
If it goes all the way to court, then obviously the costs start increasing. But if you have solid terms of service around adding collection costs and other fees, then they can be added.
For example. If a hair dresser has someone book in for a colour and blow wave, and they leave without paying, they are out of pocket around $150.
Following up on the debt, as long as it is clear that costs will be added might look like this:
| Base amount: | $150.00 |
| Commission: | $52.50 |
| Total: | $202.50 |
When a debtor see the amount and are made aware that other costs could be added plus their credit rating getting affected it is a very powerful incentive for them to make contact.
So next time you have a smaller debt, don’t ignore it, send it to us and we can likely get most if not all of the money into your bank account where it belongs.