What is the difference between a debt collection agency, a bailiff, and a lawyer?

When an invoice remains unpaid, the decision to initiate a debt collection procedure eventually has to be made. As an entrepreneur, you can choose between a debt collection agency, a bailiff, or a collection lawyer. But how do you know what to choose?

In principle, a debt collection agency, a bailiff, and a lawyer share the same goal: they help entrepreneurs collect unpaid invoices. However, there are significant differences between these parties regarding their methods, quality guarantees, and costs.

Methods: Debt collection agency, bailiff, and collection lawyer

In practice, there are major differences in how these three parties collect a claim. This is primarily due to the different levels of authority and pressure tactics they are legally permitted to use.

Methods of bailiffs and collection lawyers

The legal powers of a bailiff and a collection lawyer go further than those of a debt collection agency. For example, they are authorized to issue court summonses and seize a debtor’s personal property or income.

Methods of debt collection agencies

A debt collection agency specializes in recovering claims without court intervention. While a bailiff and a lawyer focus primarily on legal procedures, a collection agency acts as an intermediary between the entrepreneur and the debtor.

A capable and experienced debt collection agency understands debtor profiles and knows exactly which measures are required for a successful recovery.

Quality: Debt collection agency, bailiff, and collection lawyer

Deciding to outsource the collection of an outstanding claim can have an impact on your business, as a third party will be contacting your customer on your behalf. Even though you may be frustrated by the lack of payment, it is important that the collection procedure is carried out properly. Engaging an unreliable or shady party can negatively impact your company's image.

Quality of bailiffs or collection lawyers

In the Netherlands, bailiffs are supervised by the Bureau of Financial Supervision (BFT), which ensures they adhere to legal regulations and professional standards. Collection lawyers are registered with the Netherlands Bar (NOvA). If they are deemed competent, they are entered into 'the tableau.' Bailiffs and lawyers can be dismissed from their duties for malpractice, after which they are no longer permitted to practice.

Quality of debt collection agencies

In the Netherlands, debt collection agencies do not have a protected legal status, meaning that in principle, anyone can start an agency. This gives unreliable parties the room to present themselves as professional collection partners.

For this reason, the Dutch Association of Certified Debt Collection Agencies (NVI) has established an extensive quality framework. Collection agencies are audited by an external auditor based on these criteria. Only agencies that meet these requirements receive the NVI quality mark. Entrepreneurs can recognize a high-quality, reliable agency by this NVI mark.

Costs: Debt collection agency, bailiff, and collection lawyer

For many entrepreneurs, costs play a significant role in choosing a collection partner. The costs for parties with more severe legal powers are generally much higher, making a debt collection agency more affordable in most cases compared to a bailiff or a collection lawyer.

Costs of bailiffs or collection lawyers

Bailiffs and lawyers often follow (legal) procedures that involve the court, which often involves high hourly rates. These legal costs can make an individual case unnecessarily expensive. Furthermore, not all parties are equally transparent about their cost structure, leading to unpleasant surprises on the final invoice.

Costs of a debt collection agency

When an invoice remains unpaid, collection fees may be charged. These are legally defined and added to the principal amount. In general, these collection fees serve as compensation for the agency's efforts. Because agencies typically do not work with high hourly rates or undefined commissions, they are often more cost-effective than bailiffs or lawyers—especially considering that these collection fees are meant to be paid by the debtor.

80% of all files are closed without court intervention

Collection lawyers and bailiffs often emphasize their stronger legal powers. However, research shows that 80% of outstanding claims are settled without the intervention of a judge. In these cases, the specialized knowledge of a certified debt collection agency provides the optimal solution for both the debtor and the entrepreneur.