Selling bad debt to a debt collection agency?

sparkiestfiend

Hi there - I hope someone can help me on this

Myself and my business partner own a small private day nursery where at present we have £8157.00 worth of bad debt.

Some of this has been outstanding for a couple of years and some of it only a few months. We have tried chasing the customers ourselves with letters, emails, phone calls. We have then passed some of the debt on to a local debt collection agency who have had some success, but take a 20% cut. We have some customers who claimed they would set up regular payments, but never did.

We have also chased a couple of them through the small claims court but again, to no avail as to enforce the CCJ for non payment after an agreement was set up was just going to cost us more money!

We are now in the process of securing new premises, so as you can imagine £8000 odd pounds would come in very handy at the minute!

Any advice as to what to do next would be greatly appreciated - I have tried to google 'selling bad debt' but don't seem to have come up with too much as one of our other problems is that we are in Northern Ireland, so any companies that looked like they might be able to help are England and Wales only....grrrr!

Thank you in advance

paddyrg

Oooh how horrid! I don't know about selling it on (try asking your bank, some have in-house agencies, although for sold-on debt expect some tens of pence in the pound, depending on the contracts you have), but in the future, can you offer a 5% discount for advance-paying customers, or only accept debit card standing orders, or something?

bengalknights

The best thing to do with stick with the DCA as a 20% cut is better than 10p in the £1 that vulture funds etc would offer.

sparkiestfiend

Thanks, we have a hefty late payment penalty if bills are paid late, we also now suspend children's places if one invoice is unpaid, but the problem is that it's a bit of a vicious circle, if you suspend the child's place you are unlikely to see the family who owe you money ever again!

We'll maybe have a proper think about doing it the other way round and offering a discount for early payment rather than penalty for late!

Savvy_Sue

sparkiestfiend wrote: »

We'll maybe have a proper think about doing it the other way round and offering a discount for early payment rather than penalty for late!

I'd say that was a good idea: you could even couple it with a price increase, along the lines of "After x years we have had to raise our prices, however if you pay your invoice in full before the first session your child is scheduled to attend we will give a X& discount." Up to you whether that discount brings people back to current prices or below them ...

Changing the subject, would you have anything useful to add to this thread? No need to reply here, just head over there ...