Collection Agreement

How does the collection management agreement work?

Firstly, all clients must comply with the legislation in their industry for us to be successful in our debt management. For instance, if you are a micro lender you need to comply fully with the National Credit Act.

We have 2 proposals available to new clients:

  • Full capital return (100%), but if a file is not collectable you are liable for the real expenses incurred.
  • Partial capital return (75%), without any additional costs if a file is not collectable.

If money has been collected, we do pay-outs on a monthly basis.

Each file carries its own cost, as long as the agreement is upheld by our clients.

The status of every case handed over can be checked on our website 24/7 with detail that includes capital, payments and legal diary for each debtor.

We will hand back your files cost-free if we do not meet your reasonable expectations within four months from our initial agreement.

As we carry the costs it important to get (new) work on a regular basis and this is one of the terms and conditions of our contract.

We have a near-paperless system in place and handovers can be done by scanning and e-mailing, faxing, posting or via physical collection.

Our representatives will make contact on a regular basis and our client service team is just a phone call or e-mail away.

For your convenience you need only speak to one person at our office to handle all your requests and queries.

The first payments received will fund the disbursements of tracing, sheriffs and attorneys. The rest of the payments will be distributed 50/50 after management commission, until the cost and capital are paid in full.

Debtors are liable for the cost accounts. On immediate settlements, ProDebt will take a 10% commission, i.e. 90% of the capital will be paid over to the client in these instances.

Types of Collection Agreements

Legal collection 75% capital back

  • EXPLANATION
  • All debt gets collected by means of the legal process. Debt must not be older than 150 days since service date and handovers must be regular not exceeding 4 month intervals.
  • PROCESS
  • The debtor gets contacted formally and given the opportunity to pay his debt without a legal process. Failing to comply results in a full legal process of collection. If the debtor does not comply with arrangements the legal process follows to get judgement, garnish orders or warrant of execution against property. Uncollectable matters get stopped by the discretion of the collector. Regular payments get monitored and contact is made on a regular basis to insure payments is made.
  • DISTRIBUTION OF PAYMENTS
  • As there are no cost account for the client and costs get carried by the collector the client will only receive 75% back of all monies collected. The company will keep 25% to carry the expenses of the collection process.
  • AGE OF DEBT
  • We prefer regular handovers and debt not older than 150 days. If debt is older there are more risk involve and then the pay over percentage may lower to cover for the risk. This will be negotiated.
  • COST FOR CLIENT
  • There are no legal costs to be paid by the client except when the client is in default to pay over the money that was paid directly to the client or when the client provides faulty information which causes to withdrawal the action.
  • PAYOUT PROCESS
  • Every month a distribution takes place of payments received on debt. On payments received on debt the collections commission and VAT is deducted, where after the balance is divided 50/50. You will receive pay-outs until the 75% of the capital is covered and the balance of 25% will be held by the collector.
  • LEGAL COLLECTION
  • The first payments goes to the disbursements like sheriff costs and legal costs. (External accounts we had to pay). After the accounts has been paid we distribute the payments 50/50 until the client received his 75% of the capital. Only matters stopped by yourself gets deducted from the pay-out.
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Legal collection 100% capital

  • EXPLANATION
  • Full on legal collection process. All debt not older than 2 years. The collector has carte blanch and may use any legal means of collecting the debt.
  • PROCESS
  • The debtor gets contacted formally and given the opportunity to pay his debt without a legal process. Failing to comply results in a full legal process of collection. If the debtor does not comply with arrangements the legal process follows to get judgement, garnish orders or warrant of execution against property. Uncollectable matters get stopped by the discretion of the collector. Regular payments get monitored and contact is made on a regular basis to insure payments is made.
  • DISTRIBUTION OF PAYMENTS
  • The client gets 100% back of capital handed over when collection is completed.
  • AGE OF DEBT
  • Age of debt is important as fresher debt get collected faster but it’s the discretion of the client in this matter.
  • COST FOR CLIENT
  • The client pays for all costs on uncollectable matters. This is the most costly collection process, but it’s sometimes worth the risk if the debt is fresh and not older than 120 days.
  • PAYOUT PROCESS
  • Every month a distribution takes place of payments received on debt. On payments received on debt the collections commission and VAT is deducted, where after the balance is divided 50/50. You will receive pay-outs until the 100%.
  • LEGAL COLLECTION
  • The first payments goes to the disbursements like sheriff costs and legal costs. (External accounts we had to pay). After the accounts has been paid we distribute the payments 50/50 until the client received his 100% of the capital. ALL UNCOLLECTED MATTERS are worked out to real expenses and the matters stopped by yourself gets deducted from the pay-out. If we recommend to stop a matter and the client is persistent the liability for the costs will be for the client’s account.
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