A debt-collection agency is hoping to capitalise on the government’s plans to increase the bankruptcy threshold after being granted an alternative business structure licence by the Solicitors Regulation Authority.
Nottingham-based Legal Recoveries & Collections Ltd (LRC) says ABS status will give the agency the ‘edge’ on its competitors ‘by being able to offer a full collections and recoveries service all under one roof without the need anymore to have to outsource to a third-party law firm’.
Managing director Andrew Newsome said obtaining ABS status was important to the business ‘because we want to align ourselves fully with the regulatory framework that our clients work in and therefore demonstrate our commitment to them and their customers’.
From October, the level for which a creditor’s bankruptcy petition may be presented to the court will rise from £750 to £5,000.
As a result of the increase, LRC said creditors would no longer be able to rely on statutory demands, and then bankruptcy proceedings, to recover debts between £750 and £5,000.
‘As a result of this change, creditors will therefore only have the option of the county court route for recoveries and LRC aims to capitalise on this change by offering very reasonably priced fixed fees for litigation to creditors,’ it said.
The firm said, notwithstanding courts increasing issue fees, litigation was again becoming a popular and valuable tool in creditors’ armoury to recover debts.
‘With correct customer intelligence, segmentation and score-carding applied to accounts, recoveries through litigation often far outweigh a pre-legal contingent-only strategy,’ it said.