How to choose between an attorney and a debt collector

Knowing how to choose between an attorney and a debt collector is one of the most valuable skills a credit manager, CFO or SME owner can have.

Get it right and you recover your money faster, at a lower cost, while protecting your client relationships. Get it wrong and you end up with runaway legal bills, a damaged business relationship — and possibly still no payment.

This guide gives you a straight-talking, practical framework to make that call with confidence every single time.

Table of Contents1. The Short Answer: Attorney or Debt Collector?2. What Does a Debt Collector Actually Do?3. What Does an Attorney Do in a Debt Recovery Context?4. Key Differences: Cost, Speed, and Recovery Rate5. When to Choose a Debt Collector6. When to Choose an Attorney7. The Hidden Costs Nobody Talks About8. 5 Troubleshooting Tips When Your Recovery Strategy Isn’t Working9. Our Team’s Experience: What We’ve Seen in the Field10. FAQ: How to Choose Between an Attorney and a Debt Collector1. The Short Answer: Attorney or Debt Collector?Use a debt collector first. In the majority of commercial debt recovery cases in South Africa, a registered debt collector is faster, cheaper, and just as effective — often more so — than going straight to an attorney.

Attorneys should come into the picture when a debt is genuinely disputed, when litigation is unavoidable, or when the amount is significant enough to justify the legal costs involved.

That is the short answer. The rest of this article explains exactly why — and gives you the decision-making tools to apply this in your business right now.

2. What Does a Debt Collector Actually Do?A registered debt collector operates under the Debt Collectors Act 114 of 1998 and is regulated by the Council for Debt Collectors (CFDC). Their role is pre-legal: they contact your debtors, negotiate payment arrangements, apply pressure through professional demand letters, conduct skip tracing, and escalate to default listings where necessary — all without the cost of court proceedings.

A good commercial debt collector works on a no success, no fee basis. That means zero financial risk to your business until money is actually recovered. They also act as an extension of your company, protecting your brand reputation throughout the process.

Key activities a debt collector handles:

* Sending formal demand letters and notices* Making direct debtor contact and negotiating payment terms* Skip tracing (locating debtors who have disappeared)* Listing defaulting debtors with credit bureaus* Referring cases to attorneys when pre-legal efforts are exhausted* For a deeper understanding of the full process, read our guide: The Complete, Proven Guide to the Debt Collection Process in South Africa.

3. What Does an Attorney Do in a Debt Recovery Context?An attorney — specifically one specialising in collections — has the legal authority to issue summons, appear in court, apply for judgments, and execute against assets. Their toolkit includes magistrate’s court action, High Court proceedings, emolument attachment orders (garnishee orders), and sequestration applications in severe cases.

Attorneys are registered with the Legal Practice Council of South Africa and are held to strict professional standards. Their involvement is appropriate — and necessary — when a matter reaches the litigation stage.

However, this power comes at a price. Attorneys typically charge on an hourly or per-item basis. Unless the debt is substantial, legal costs can easily consume a significant portion of the amount you recover.

4. Key Differences: Cost, Speed, and Recovery RateUnderstanding how to choose between an attorney and a debt collector becomes much easier when you compare these three dimensions side by side:

Factor                                               Debt Collector                                       Attorney Cost structure                          No success, no fee                    Hourly/item-based fees (win or lose)Speed                                      Faster — weeks to month          Slower — months to yearsBest for                                    Undisputed, pre-legal debts       Disputed debts, litigation, large amountsClient relationship impact        Lower                                         HigherRegulatory body                      Council for Debt Collectors        Legal Practice CouncilCourt access                           No                                              Yes“The biggest mistake businesses make is going straight to an attorney out of frustration, not strategy. Nine times out of ten, a professional debt collector could have resolved it in half the time at a fraction of the cost.” — Kredcor, Commercial Debt Recovery Partners5. When to Choose a Debt CollectorThis is where most of your cases will fall.

Choose a debt collector when:

* The debt is undisputed — the debtor acknowledges owing the money but isn’t paying.* The relationship matters — you want to preserve the business relationship if possible.* The amount is moderate — legal costs would eat too deeply into recovery.* Speed is a priority — you need cash flow, not a court date months away.* The debtor has gone quiet — a collector’s skip tracing and contact capabilities are invaluable.* You want a no-risk, contingency-based approach — no recovery, no fee.* According to ADRA (the Association of Debt Recovery Agents), the majority of commercial debts are resolved at the pre-legal stage — meaning professional debt collection gets the job done without ever needing a lawyer.

If you’re a credit manager dealing with a backlog of overdue accounts, a structured pre-legal collection process will clear most of them more efficiently than routing everything through a law firm.

6. When to Choose an AttorneyAttorneys earn their place in the process when the situation demands legal authority.

You should instruct an attorney when:

* The debt is formally disputed — the debtor contests the amount, terms, or liability.* Court action is unavoidable — you need a summons, judgment, or writ of execution.* The amount is large — where legal costs are proportionate to what’s at stake.* Assets need to be attached — only an attorney can execute against property or apply for a garnishee order.* The debtor is insolvent — sequestration or liquidation proceedings require legal expertise.* Contractual enforcement is needed — breaches involving complex commercial agreements.

In these scenarios, trying to manage the matter through a debt collector alone is the wrong move. You need someone who can stand in front of a magistrate or High Court judge.

A smart approach many businesses use is a two-stage model: start with a debt collector, and only escalate to an attorney if pre-legal efforts fail or the situation demands litigation. Kredcor, for example, works with an approved panel of law firms for exactly this kind of escalation — keeping costs controlled while ensuring you have legal firepower when it’s needed.

7. The Hidden Costs Nobody Talks AboutWhen weighing how to choose between an attorney and a debt collector, most people focus on the obvious fees.

But there are hidden costs worth considering:

* Time cost: Every month a debt goes unresolved costs your business in debtor days. Debt collectors typically move faster.* Staff distraction: Chasing debtors internally takes your team away from revenue-generating work.* Relationship damage: Heavy-handed legal action can permanently end a business relationship — even if you win the case.* Success uncertainty: With attorneys, you may win a judgment but still not collect if the debtor has no assets. Debt collectors focus on actual recovery, not just paper wins.* Emotional cost: Disputes are stressful. Having a professional intermediary removes much of that burden.8. Five Troubleshooting Tips When Your Recovery Strategy Isn’t WorkingEven with the best intentions, debt recovery strategies can stall.

Here are five practical fixes:

* Troubleshooting Tip 1: You’re using an attorney too early. If the debt is undisputed and under R100,000, step back and try a registered debt collector first. The no-success, no-fee model means you have nothing to lose.

* Troubleshooting Tip 2: Your demand letters aren’t firm enough. Internal collection letters are often too polite. Professional debt collectors use legally compliant, firm demand letters that debtors take seriously. If you’re sending the same debtor a third internal email, it’s time to hand it over.

* Troubleshooting Tip 3: You’ve lost contact with the debtor. Debtors don’t vanish — they just avoid you. A debt collector’s skip tracing capability will find them faster than anything your team can do in-house.

* Troubleshooting Tip 4: You have a disputed debt but no documentation. Before involving an attorney, make sure you have your signed agreements, invoices, delivery notes and communication trail in order. Attorneys cannot fight effectively without evidence. Get your file organised first.

* Troubleshooting Tip 5: The attorney relationship is stalling. If your attorney matter has been dormant for months with no updates, request a written status report. Consider whether the matter justifies the continued cost, or whether a negotiated settlement through a debt collector might achieve a better outcome faster.

9. Our Team’s Experience: What We’ve Seen in the FieldWe’ve worked with hundreds of SMEs, logistics companies, manufacturing businesses and HOAs across South Africa. What we’ve found consistently is that businesses who engage debt collectors early — ideally within 30 to 60 days of an account becoming overdue — achieve significantly higher recovery rates than those who wait, issue warnings, wait again, and then reluctantly hand the matter to an attorney six months later.

Our experience shows that debt age is the single biggest factor in recovery success. The older the debt, the harder it is to collect — regardless of whether you use a collector or an attorney.

We’ve also tested different approaches with the same debtor profiles. In one case study from our Gauteng operations, accounts handed to us at 45 days overdue achieved a recovery rate more than double that of accounts handed over at 120 days — even when the attorney track was used for the older accounts. Speed beats legal authority in most undisputed cases.

If you’re not sure which route is right for your specific situation, take a look at how to find the right partner: How to Choose the Best Debt Collector in South Africa for Your Business — The Proven Guide.

10. Making the Final Call: A Simple Decision FrameworkUse this quick checklist to guide your decision next time a debt lands on your desk:

Choose a Debt Collector if:

✅ The debt is undisputed✅ The debtor is simply not paying, not denying✅ You want to preserve the relationship✅ You need a no-risk, contingency-based solution✅ The account is under 90 days (or even if older — act now)

Choose an Attorney if:

✅ The debt is formally disputed✅ You need a court judgment or asset execution✅ Liquidation or sequestration is on the table✅ The amount justifies the legal spend✅ Pre-legal collection has already been attempted and exhausted

The decision of how to choose between an attorney and a debt collector doesn’t have to be complicated. In most B2B scenarios in South Africa, the answer is: start with a specialist commercial debt collector, and only escalate to legal action when the specific circumstances demand it.

To explore your options with experienced debt collectors in South Africa, Kredcor offers a free, no-obligation consultation to assess your outstanding accounts and recommend the most cost-effective path to recovery.

Ready to recover what’s owed to you? Contact Kredcor today — South Africa’s trusted commercial debt recovery partners, registered with the Council for Debt Collectors (CFDC Reg Nr 0016365/06). No hidden costs. No running bills. No success, no fee.

Frequently Asked Questions: How to Choose Between an Attorney and a Debt Collector* Q1: Is a debt collector cheaper than an attorney for recovering business debts in South Africa?

In almost all pre-legal cases, yes. Registered debt collectors work on a no-success, no-fee contingency model, meaning you pay nothing unless money is recovered. Attorneys typically charge whether or not they succeed, and legal costs — court fees, opposing counsel, disbursements — can accumulate quickly. For undisputed commercial debts, a debt collector is almost always the more cost-effective option.

* Q2: Can a debt collector take someone to court?

No. A registered debt collector operates in the pre-legal space. They cannot issue summons, appear in court, or apply for judgments. If a debt requires litigation, your debt collector should refer the matter to an approved attorney partner. Reputable firms like Kredcor work with vetted law firms for exactly this escalation, ensuring seamless handover when legal action becomes necessary.

* Q3: When is it too late to use a debt collector instead of an attorney?

It’s rarely too late to try pre-legal collection, but the older the debt, the lower the recovery rate. If a debt has already been formally disputed in writing, or if court proceedings have already been initiated by the debtor, you’ll need an attorney. Otherwise, even debts over 12 months old can sometimes be recovered through skilled negotiation — especially with experienced commercial collectors.

* Q4: What happens if the debtor disputes the debt during the collection process?

If a debtor raises a formal, written dispute, the matter changes character. A debt collector cannot adjudicate a dispute — that is a legal matter. At that point, the account should be referred to an attorney or your company’s legal team. However, it’s important to note that many debtors raise disputes as a delaying tactic. An experienced collector will assess the validity of the dispute before immediately routing it to litigation.

Published by Kredcor — Commercial Debt Recovery Partners | CFDC Reg Nr 0016365/06 | Kredcor operates across South Africa — Gauteng, Cape Town, KwaZulu-Natal — and across Africa and Globally.

About Kredcor:Kredcor is one of South Africa’s leading specialist commercial debt collectors, with over 26 years of experience in B2B debt recovery. We operate on a strict no-success, no-fee basis — no admin fees, no monthly fees, no handover fees. Our dedicated relationship managers handle every account personally, providing transparent monthly progress reports and pre-approved escalation paths. We are registered with the Council for Debt Collectors.