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What is the success rate for debt recovery cases in relation to the amount owed?

Duwayne Starling

Hey there! Thanks for asking about the success rate for debt recovery cases in relation to the amount owed. It's actually a pretty complicated question with a lot of variables to consider, so bear with me as I try to break it down.

First of all, when we talk about debt recovery, there are two main ways that it can happen. The first is through a debt collection agency, which is a third-party company that is hired to try and recover the debt on behalf of the creditor (i.e. the person or company that is owed the money). The second way is through legal action, where the creditor takes the debtor (i.e. the person who owes the money) to court in order to force them to pay.

In terms of success rates, it's generally accepted that using a debt collection agency is the more successful option. According to a survey conducted by InsideArm, a trade publication for the debt collection industry, the recovery rate for debt collection agencies is around 20-25% on average. However, there are a lot of factors that can impact this rate, including the age of the debt, the amount owed, the type of debt (i.e. credit card vs. medical), and the location of the debtor.

When it comes to legal action, success rates vary greatly depending on the specifics of the case. In some cases, the creditor may win a judgment against the debtor and be able to garnish their wages or put a lien on their property in order to recover the debt. However, in other cases, the debtor may declare bankruptcy or simply not have enough assets to cover the debt, which can make recovery extremely difficult.

As for how the amount owed impacts success rates, it's worth noting that larger debts can actually be more difficult to recover. This is because the debtor may be more likely to fight back against attempts to collect the debt, and they may also have more resources to hire lawyers or mount a defense in court. Additionally, larger debts may be more likely to be tied up in legal disputes or bankruptcies, which can further complicate the recovery process.

All of that being said, it's important to remember that there is no one-size-fits-all answer when it comes to debt recovery success rates. Every case is different, and there are a lot of factors that can impact whether or not a debt is able to be recovered. However, if you're dealing with a debt that you're having trouble collecting, I would definitely recommend working with a debt collection agency or consulting with a lawyer to figure out your options. Good luck!