{"id":71051,"date":"2017-12-18T13:01:25","date_gmt":"2017-12-18T12:01:25","guid":{"rendered":"https:\/\/tcm.be\/whats-a-worthwhile-minimum-amount-for-debt-recovery\/"},"modified":"2026-01-02T09:51:36","modified_gmt":"2026-01-02T08:51:36","slug":"whats-a-worthwhile-minimum-amount-for-debt-recovery","status":"publish","type":"post","link":"https:\/\/tcm.be\/en\/whats-a-worthwhile-minimum-amount-for-debt-recovery\/","title":{"rendered":"What\u2019s a worthwhile minimum amount for debt recovery?"},"content":{"rendered":"\n

As a debt recovery company<\/a>, TCM Belgium<\/strong> is often asked what minimum sum<\/strong> makes a recovery<\/strong> effort worthwhile. Is it cost-effective for a phone service provider to recover<\/strong>a debt<\/a>of \u20ac20 or \u20ac45? Should a clinic bother instructing a debt recovery company<\/strong> to collect an unpaid debt of \u20ac400?<\/p>\n\n\n\n

The creditor\u2019s choice<\/h2>\n\n\n\n

If invoices<\/a> of less than \u20ac100 are the exception for your company, the non-payment<\/strong> of one or two of them isn\u2019t going to threaten your business. It would indeed be useful to try and obtain payment<\/strong>, but it\u2019s not a strategic issue. However, if small invoices<\/strong> make up the critical mass of your turnover, finding a solution is paramount. This very much applies to water, gas, electricity and phone companies, as well as to many vendors of other goods and services. Recovering<\/strong> these small debts<\/strong> is made all the more important by the fact that word gets around. If I find out that my neighbour hasn\u2019t been paying their bills<\/strong> to Company X, where I\u2019m also a client, and also that there\u2019s been no backlash for them, I\u2019d feel like I\u2019d been a bit of a mug paying and I\u2019d be inclined to also default on my debts<\/a> to creditor<\/a> X. This can best be described as the debtor<\/a> domino effect.<\/p>\n\n\n\n

Are smaller debts easier or more difficult to recover?<\/h2>\n\n\n\n

 <\/p>\n\n\n

\n
\"TCM<\/figure>\n<\/div>\n\n\n

Some debtors<\/strong> argue that a creditor<\/strong> is less likely to put a lot of effort into recovering \u20ac20 or even \u20ac80, as the recovery cost<\/a>s could very well exceed the amount of the debt<\/strong>. This has the paradoxical effect of making the recovery of small debts<\/strong> harder than the recovery<\/strong>of amounts between \u20ac1,000 and \u20ac5,000. Therefore, the smaller the amount owed<\/strong>, the harder we have to work to recover<\/strong> it. The graph below shows that at TCM<\/a> (where we make efforts to recover all debts, even small ones), the easier bracket is \u20ac50 to \u20ac150, even though in theory from \u20ac10 to \u20ac50 should be more straightforward to recover<\/a>. \u00a0 \u00a0<\/p>\n\n\n\n

The cost of recovering a small debt<\/h2>\n\n\n\n

\u2018No cure, no pay<\/a>\u2019. This payment<\/strong> principle itself provides part of the solution, as regardless of the amount of an unpaid<\/strong> invoice, the creditor only pays for the recovery company<\/strong>\u2019s service when the latter actually succeeds in recovering the amount owed. Therefore, there\u2019s no risk for the creditor and no advantage in the debt recovery company<\/strong> incurring disproportionate costs. With this system, the cost of recovery<\/strong> is a percentage that will be deducted from the recovered amount. This rate is then agreed between the creditor and the recovery firm before<\/strong> recovery efforts are commenced, depending on the estimated cost and the probability of recovery (based on the statistics). It will be higher on small amounts, as recovering \u20ac50 costs almost as much as recovering \u20ac500.<\/p>\n\n\n\n

Cutting the costs of recovering a small debt<\/h2>\n\n\n\n

By adapting yourgeneral terms and conditions<\/a>, you can pass on part of the recovery cost<\/strong> to the person or company which generates this cost, most notably with a fixed charge<\/a>. Since you\u2019ll have gathered, a recovery<\/strong> attempt can be made on any debt, although the relative cost of recovering a small debt<\/strong> is higher. However, one economic reality needs to be weighed against another, namely the risks associated with not trying to recover amounts<\/strong> because they are small. Contact us<\/a> for a service tailored to your needs.<\/p>\n\n\n\n

<\/p>\n\n\n