Debt collection services in Saudi Arabia are considered among the fundamental elements that contribute to maintaining business stability and perpetuity for companies and institutions. The debt collection process is a vital tool that ensures the recovery of overdue debts and maintains the necessary fiscal liquidity for the continuity of commercial operations. Companies may, through implementing the effective management of debt collection, mitigate the financial risks and strengthen trust in their relationships with customers. These services offer legal and regulatory solutions designed to resolve debt-related disputes professionally, ensuring the protection of existing business relationships while adhering to local laws and regulations.

First: Definition of Debt Collection Service
A debt collection service is the process of pursuing payments of money owed by a debtor, whether it is an individual or a facility, to a creditor. Debt collection services in Saudi Arabia are typically conducted on a contingency fee basis. It should be noted that specialized firms and agencies are responsible for carrying out this service, and one of the most famous debt collection firms in Saudi Arabia is Dr. Fahad Al-Rafaei & Partners Consulting & Law Firm, which enters into a contract with creditors, whereas the creditor appoint and authorize the agency or law firm to collect overdue payments on behalf of the creditor if the debtor fails to pay the debts within the time limit.

Based on the foregoing, we can conclude that the debt collection process in Saudi Arabia hinges on three primary elements as follows:

1. The Creditor: The Party that extends loans or credit to another party (the debtor) with the expectation of repayment within an agreed-upon timeframe.

2. The Debtor: The Party that receives loans or credit from the creditor and is obligated to repay the amount by the agreed-upon date.

3. The Debt Collection Firm: This entity acts as an intermediary, specializing in collecting overdue debts on behalf of creditors.

Second: Types of Debts

There are various types of debts that Dr. Fahad Al-Rafaei & Partners Consulting & Law Firm collects, the following are examples of:

1. Corporate Debt Collection: Dr. Fahad Al-Rafaei & Partners Consulting & Law Firm saves time and effort for companies and institutions through recovering delinquent or current debts, including bad debts, effectively, whether inside or outside the Kingdom of Saudi Arabia.
2. Bank Debt Collection: One of Dr. Fahad Al-Rafaei & Partners Consulting & Law Firm services is the collection service of all types of debts, including recovery of securities, shares, and loans extended to individuals and businesses, with offering the best solutions to motivate debtors to pay their debts.
3. Regular Payment Collection: Dr. Fahad Al-Rafaei & Partners Consulting & Law Firm undertakes the responsibility of collecting debts owed by individuals on behalf of creditors. We pursue the collection of individual creditors' debts through both on-site and legal procedures, where needed, in a short time.
4. Commercial Debt Collection: Dr. Fahad Al-Rafaei & Partners Consulting & Law Firm specializes in dealing with traders who fail to pay their debts resulting from commercial transactions, employing a strategic approach that begins with negotiation and may escalate to bankruptcy proceedings if necessary.
5. Dishonored Check Collection: Dr. Fahad Al-Rafaei & Partners Consulting & Law Firm specializes in dealing with debtors who issued bounced checks or dishonored checks. These checks are returned by the bank due to insufficient funds, accordingly, the debtor failed to pay the cheque’s value within the agreed period.
6. Promissory Note Collection: This is the collection of payments that a debtor has committed to pay on a specific date to order of a particular person, with the need to recover these amounts within the validity period of the promissory note, which extends for three years from the due date.
7. Bills of Exchange Collection: Bills of exchange differ from promissory notes in that bills of exchange constitute a written order from the drawer to the drawee to pay a specified sum to a third party at sight or on a specific date.
8. Collecting Inheritance and recovering it from the Estate: The estate is distributed according to Islamic law. Our office handles cases involving individuals who refuse or delay in distributing the estate, ensuring that each heir receives his rightful share.
9. Mortgage delinquency and payments collection: Dr. Fahad Al-Rafaei & Partners Consulting & Law Firm collaborates with real estate financing companies to collect overdue mortgage delinquency from delinquent customers by reaching mutually agreeable arrangements.
10. Collecting insurance claim amounts: Insurers are keen on collecting the premiums from customers. In case of non-payment, collection firms step in to investigate the reasons and employ negotiation strategies with delinquent customers.
11. Collection of disputed payments: Dr. Fahad Al-Rafaei & Partners Consulting & Law Firm, as the leading debt collection firm in Saudi Arabia, is able to negotiate and reach amicable solutions between the debtor and creditor, saving time and effort instead of waiting, which may be prolonged without the creditor receiving his due rights, or waiting for a court judgment.
12. Collection of unpaid invoices: Dr. Fahad Al-Rafaei & Partners Consulting & Law Firm handles customers who delay payment of their bills, such as electricity or phone bills, by identifying the reasons for the delay and offering installment options to facilitate payment.

Third: Debt collection skills in Saudi Arabia

Debt collection skills in Saudi Arabia are essential for facilitating collection processes and achieving objectives. The debt collection team at Dr. Fahad Al-Rafaei & Partners Consulting & Law Firm possesses the following key skills:

Persuasion and negotiation skills: A specialist in this field must have a comprehensive understanding of various technical information and documentation to enhance negotiation opportunities. The ability to persuade a debtor to pay is a unique skill that requires patience, with the primary objective being to initiate negotiations, reach a solution, and then convince the debtor of the benefits of that solution.

Communication and connection skills: These skills are applied in the real life to convey ideas, information, or written and verbal messages, accompanied by facial expressions and body language, through various communication channels. The ultimate goal is to reach a settlement for the creditor's debt without resorting to legal action.

Assertive Communication skill: Assertiveness is a fundamental communication skill that enables individuals to express themselves clearly and advocate for their position while respecting the rights of others. This approach relies on diplomacy and effectiveness, as it is grounded in mutual respect, understanding others' rights, and a willingness to work towards resolving disputes related to overdue debts.

Understanding psychological and behavioral aspects: Understanding the debtor's psychology and thought process can expedite finding solutions for overdue debts. This can be achieved by offering solutions that the debtor perceives as being in his best interest.

Risk- reward balancing: By balancing risks and rewards, amicable settlement solutions can be found between the creditor and debtor, allowing the creditor to recover his rights even if it requires making concessions. Additionally, agreements can be reached to extend the repayment period and divide the debt into smaller installments to ensure collection.

Dealing with technology and modern techniques: By utilizing technology and modern software, all debt collection processes can be streamlined, allowing for comprehensive review and reference of all actions taken. Additionally, this skill facilitates pursuing the payments and serving notifications to customers and debtors.

Fourth: Debt collection strategies in Saudi Arabia

There are different types of debt collection strategies, as Dr Fahad Al-Rafaei & Partners Consulting & Law Firm adopts various methods in collecting debts in Saudi Arabia, each one based on systematic plans. Perhaps one of the best debt collection strategies in Saudi Arabia is the following:

1. Obtaining the necessary information and documentation to contact the debtor and collect overdue debts.
2. The initial collection phase and amicable negotiation with the debtor:

The debt collection process from the debtor commences with amicable approaches, which rely heavily on negotiation skills and an understanding of diverse circumstances. This process mandates the utmost patience and self-control. The assigned collector shall thoroughly assess the debtor's financial situation and devise collection plans tailored to their specific circumstances. If the debtor is unable to settle the entire amount, it may be more advantageous to reach a settlement that offers benefits beyond immediate payment. In such instances, the debt collection office works to draft an agreement that ensures an amicable resolution between the office and the debtor, guaranteeing full debt repayment, even if it is in installments, regardless of the repayment period. The primary objective of amicable settlements is to retain the debtor and avoid resorting to legal, as legal proceedings can result in significant losses for the creditor.

1. Pre-action procedures:

If amicable negotiations in Saudi Arabia with debtors fail, Dr. Fahad Al-Rafaei & Partners Consulting & Law Firm, as a debt collection specialist firm, may take certain necessary procedures before resorting to legal action, including the following:

• Repeated visits: The debt collection team of the firm requests to visit the debtor repeatedly to apply pressure and persuade him to resolve the matter without resorting to legal action.
• Communications and messages: The debt collection firm intensifies communication with the debtor and sends messages warning of the seriousness of the situation if a mutually satisfactory agreement is not reached.
• Social pressure: The debt collection firm applies social pressure through home visits or making telephone calls.
• Filing a lawsuit:

If all amicable methods fail, Dr. Fahad Al-Rafaei & Partners Consulting & Law Collection Firm may be compelled to resort to legal action to recover overdue debts. A lawsuit will be filed against the debtor, who will be summoned to court, where the court will take the necessary actions to tender a court judgment if no satisfactory resolution is reached for all parties involved. The court judgment will be binding on both the debtor and the creditor.

1. Monitoring the enforcement of the court judgment:

Once a court judgment is obtained, the debtor shall pay the debt, Dr. Fahad Al-Rafaei & Partners Consulting & Law Collection Firm begins the enforcement of this judgment. This is done through compulsory or direct execution based on the executive instrument, which serves as the legal basis for the enforcement. Compulsory enforcement procedures shall only be initiated by the creditor who holds the executive instrument. The instrument shall remain valid until the judgment is enforced. If the executive instrument is canceled, this means that the legal basis for enforcement has been removed, requiring the restoration of the situation to its status prior to enforcement.

To consider the executive instrument enforceable, the following conditions shall be met:

1. The executive instrument shall be a specified amount clearly.
2. The executive instrument shall not violate Islamic Sharia law or the public order of the state.
3. The right contained in the executive instrument shall be due and available for immediate enforcement, meaning the time for payment of this right has arrived and no further delay is required.
4. The right contained in the executive instrument shall be established and stable.
5. The executive instrument shall not be subject to challenge or objection by ordinary means.
6. The executive instrument shall be issued only after the enforcement system has come into effect.
7. The executive instrument shall include an obligation or a commitment to a right.

In conclusion, debt collection services in Saudi Arabia are a crucial element in ensuring business sustainability and maintaining liquidity for companies. Through these services, individuals can recover their financial rights, regardless of the type of debt to be collected, by following the debt collection strategies approved by the collection firm. These services are carried out in a legal and organized manner, which helps enhance trust between commercial parties and reduce financial risks. Therefore, debt collection services play a significant role in supporting business stability and increasing operational efficiency.

For debt collection services in Saudi Arabia, please do not hesitate to contact us at Dr. Fahad Al-Rafaei & Partners Consulting & Law Firm through our phone number 920012753 or via email at [email protected]. We would be pleased to receive your inquiries.

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