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How much does Debt Recovery cost?

Average Price
$160 to $450 per hour

What is the price of Debt Recovery and Collection?

Need help recovering a debt but not sure how much it will cost? Read our handy guide to find out how much your debt collector will charge for their services.

What is Debt Recovery?

Debt recovery specialists help businesses and individuals reclaim millions of dollars across Canada every year. 

People can get into debt for a variety of reasons. This includes unpaid medical bills, missed mortgage payments, student loans, credit cards, and much more. 

If the debt is not paid, then the company that sold the goods will financially suffer. Therefore, the money needs to be recovered, which is where debt recovery comes in. 

Debt recovery usually involves phone calls and letters to the debtor and may progress to visits or court action if the communication is ignored. The aim is to recover the debt either through cash payment or by selling goods that the debtor owns to cover the costs. 

The service can either be performed by a debt recovery agency or a debt recovery attorney.

How much does Debt Recovery cost?

Debt recovery is usually charged on a ‘no-win, no fee’ basis. This means they will only charge you if successful. If the debt can be recovered, then the cost is often priced as a percentage, especially when using a debt collection agency over a debt collection attorney. 

When debt recovery is priced per hour, you should expect to pay between $160 and $450 per hour. This cost is based on what a debt attorney would charge, rather than a collection agency that doesn’t usually price their services as hourly rates.

So, the method of debt recovery you choose (debt collection agency vs debt collection attorney) will have the biggest impact on costs. 

Average cost of Debt Recovery
Average cost (per hour) $250
Minimum cost (per hour) $160
Maximum cost (per hour) $450

What changes the price of Debt Recovery? 

The cost of debt recovery varies depending on several factors, including: 

  • Value of debt

  • Complexity of case

  • Recovery rate

  • Time

  • Experience - Debt Collection Agency vs. Debt Collection attorney

  • Location

Value of debt

Most debt recovery agencies work on a ‘no win, no fee’ basis. Their services are normally priced on a contingency structure, that takes into account a percentage of the debt owed to you, rather than giving you a fixed fee for their service. 

Average cost of Debt Recovery based on the value of debt
Value of debtTypical percentage charged
Under $1,00050%
$1,000 - $5,00025%
$5,000 - $50,00020%
$50,000 - $500,00015%
Over $500,00010%

Smaller cases under $1,000 are typically the most expensive, costing 50% of the total debt if the professional can recover them. This would mean a $500 case would cost you $250 if recovered successfully. 

While smaller cases are pricier, you have to factor in the operational costs of the agency or attorney. Unless they charge a high rate, it may not be commercially viable for them to take on your case. Plus, it’s better to recover some money than none at all. 

On the other end of the scale, cases totalling $500,000 or more will have a reduced rate of 10% of the total debt on average. This would mean their services would cost $50,000, for a debt of $500,000

Complexity of case

No two debt cases are the same. If your case is extremely complicated involving several debtors or extremely high sums of money, then it may take longer to solve. If the case is billed per hour, this could become very costly. Though, legal action is often needed for very complex cases, as debt recovery agencies cannot represent you in court. 

Recovery rate

When choosing a debt collector, it’s tempting to go for the company that offers the cheapest rates. But what you have to consider is the recovery rate, as ultimately that will give you a greater idea of the level of money you are likely to receive. 

Time

Some services will be billed per hour and others as a fixed fee. Either way, the longer your case drags on the more it will cost. You can help manage any associated costs by having your paperwork in order and giving clear communication throughout. Plus, taking your time to consider the professional you choose, and whether an agency or attorney would best suit your needs. 

Experience - Debt Collection Agency vs. Debt Collection attorney

When trying to recover a debt you have the option of using a debt collection agency or a debt collection attorney. 

A collection agency can help recover small debts. They do so by getting in contact with the debtor and will try to negotiate a repayment plan. Though, payment requests are as far as a collection agency will be able to go as they cannot represent you in court.

However, a collection attorney can represent you in court. Therefore, if the debt is particularly large or you anticipate the case will require legal action, then you should opt for a collection attorney over a collection agency. 

The only downside is that from a price perspective, an attorney is always going to be more expensive unless the percentage taken from the debt would be too high. Though, if you need legal help and this is not available with an agency, it would be better value to hire an attorney instead. 

Location

The cost of debt recovery varies widely depending on the complexity of your case. However, your location will also impact the cost since there are different living and operational costs in each area of Canada.

Debt collection attorneys are typically more expensive in Toronto, averaging at $450 per hour. 

This falls to $160 in Yellowknife, which is a cheaper area of Canada to access debt recovery services in.

Average cost of Debt Recovery based on the location
LocationAverage debt recovery cost (per hour)
Calgary$325
Toronto$450
Winnipeg$220
Quebec City$275
Yellowknife$160

The complexity of the case and whether you do opt for an attorney or a debt collection service will impact the cost, regardless of where you are based. 

Is it worth getting Debt Recovery?

Debt recovery can be a complex process. If you haven’t succeeded in recovering the money up to this point, then it’s worth enlisting the help of the experts. Debt recovery attorneys or collection agencies will contact the debtor on your behalf to negotiate a deal. If this doesn’t work, then you have the option to take the debtor to court. Compared with taking no action, debt recovery is far more likely to achieve a successful result. 

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