Three reasons validate why you should seek the services of a collection agency, before starting a claim action in Small Claims Court.
- Court action is costly.
- Court action is difficult and time-consuming.
- You must have a strong case to win a judgment.
Using a collection agency first saves money.
If you sign a contract with a collection agency such as Canadian Express Collection Agency (CECA), we will save you time and money, using advanced debt-recovery technology to locate and contact the debtor. This will save you the expense of court-action filing fees, which can add up. Further, we will preserve your business relations with them for future sales to your company. Your pursuit of a claim action beforehand could damage it.
The number and types of fees you may pay depend on how your case proceeds through the small claims legal process. Fees to file a claim action, motion, and request for trial date are standard. If you need to enforce or appeal a judgment, you can expect to pay for these actions also. Using a collection agency like CECA, you pay one fee only, contingent on our recovering the entire debt. If CECA fails to recover the debt, you pay nothing.
Claim action fees add up quickly.
A Small Claims Court action is taxing, requiring filing of court documents, filling out claimant forms, and paying out fees to different divisions of the court to process your case. These can include court clerk, sheriff, bailiff, and court reporter fees. If you win your judgment, but the debtor still won’t pay, you may pay enforcement fees, appeal fees, garnishment fees, writs of seizure fees, and others.
Restrictions apply on the amount of debt you can recover in Small Claims Court. The jurisdictional limit in Ontario is $25,000, omitting court costs. Using the services of a collection agency, you can recover the entire debt amount.
Other restrictions apply if you fall under the frequent claimant category. If you have filed ten, or in excess of ten claims, in a year’s time, you will pay 51% more for each claim filed. Using a collection agency, such as CECA, will save you these kinds of over-charges. We place no limit on how many delinquent accounts you may refer to us, or charge extra fees for any investigative methods we may use to collect on the debt owing to you. You pay one fee only, contingent on our recovering the entire debt.
A collection agency can help gather evidence for trial.
You will need to prove your case, which will involve more fees for witness summons, travel, court attendance, and translation fees, if necessary. You will need evidence such as signed contracts, bounced cheques, and payment logs. If you have used a collection agency prior to filing a claim action, they will have gathered this evidence, saving you valuable time.
The strength of your case depends upon the strength of your evidence. Without a collection agency using professional skip tracing, recovery databases, and automated communication systems, key pieces of evidence to substantiate your claim action may go missing.
A collection agency, if given a delinquent account as soon as it becomes collectible, stands a greater chance of recovering the debt. They can move quickly—in as little as 48 hours—to start the collection process. A Small Claims Court action will take several weeks to go to trial. A collection agency will save you time in getting your money back.