Debt Recovery (Late Stage Delinquency)

When collections action has failed to persuade a customer to pay the arrears on their account, or the relationship with a customer has broken down, then the account will be transferred to debt recovery (sometimes referred to as late stage delinquency, late stage collections or recoveries). Transfer to debt recovery usually occurs when an account is between 60 and 120 days past its due date (2–4 months in arrears), but each lender has its own policy about when accounts should be transferred. Once in debt recovery the goal is to recover as much of the outstanding debt as possible in order to minimize the losses due to bad debt write-off. If a good rapport with the customer can be maintained then that is all well and good, but it is not a priority.