Disputed claims: what happens when a debtor disputes the debt

What a dispute means in Debitura

Debitura's Standard Debt Collection Agreement (SDCA) covers only undisputed monetary claims for pre-legal collection. When a debtor disputes the debt, the claim falls outside the scope of standard "No Cure, No Pay" pricing and amicable collection methods.

A claim is considered disputed when the debtor:

Contests the debt exists at all
Challenges the amount owed
Claims payment has already been made
Raises quality issues, contract disputes, or other objections

If any of these conditions apply, the collection partner cannot continue standard amicable collection activities without a separate agreement.

Why disputes matter

Disputes fundamentally change how a case can be handled. Under the SDCA, amicable debt collection assumes there is no disagreement about whether the debt is owed. When a debtor raises a dispute, the collection partner must pause standard outreach. Amicable collection methods do not apply to disputed claims under the SDCA.

From a process standpoint, disputed claims require:

Evidence gathering to support or refute the debtor's objections
Client decision on whether to pursue the matter further
Potentially, legal action with separate pricing arrangements

How disputes are handled

Client notification requirement

The client must inform the collection partner immediately if a debt becomes disputed during collection. This obligation is defined in the SDCA. Timely notification allows the partner to pause collection activities and avoid inappropriate contact with the debtor.

Amicable collection stops

Once a dispute is confirmed, the collection partner cannot continue standard pre-legal collection methods (letters, calls, payment demands) on that claim. The case requires a different approach.

Next steps: evidence and escalation options

When a dispute arises, the typical path involves:

Evidence gathering: The client provides documentation supporting the claim (contracts, invoices, delivery confirmations, correspondence). The collection partner may also gather evidence from the debtor.
Review and assessment: The partner assesses whether the dispute has merit and advises the client on options.
Client decision: The client decides whether to pursue the matter further or withdraw the case.

Custom quotes for disputed claims

Disputed claims do not qualify for standard SDCA pricing. Instead, collection partners can provide custom quotes with case-specific pricing. This may include hourly rates, flat fees, success-based fees, or hybrid arrangements depending on the complexity and likelihood of recovery.

If the assigned partner declines to quote on the disputed case, Debitura may distribute the case to other partners in the network who can provide alternative quotes.

Legal escalation

If the client wishes to pursue legal action, a separate agreement between the client and the collection partner (or a legal partner) is required. Legal cases operate under different terms than the standard pre-legal agreement. See case stages for more on the distinction between pre-legal and legal collection.

What to expect

If the client accepts a custom quote

The case proceeds under the agreed custom terms. The collection partner works on the case according to the quote, which may involve legal proceedings, further negotiation, or other approaches.

If the client declines legal action

When a dispute arises and the client chooses not to pursue legal action, the collection partner closes the case using the close code "DisputedLegalActionDeclinedByClient." This indicates the debt was disputed and the client declined to escalate.

Case closure without payment

If a disputed case closes without recovery, no success fee is charged under the SDCA (since the standard agreement did not apply). Any fees under a custom quote depend on the terms agreed in that quote.

Impact by actor

Client

Must notify the collection partner immediately if a dispute arises.
Decides whether to provide evidence, accept a custom quote, pursue legal action, or withdraw the case.
Not charged success fees under the SDCA for disputed claims that do not proceed to collection.

Collection Partner

Pauses standard amicable collection activities when a dispute is confirmed.
May offer a custom quote for handling the disputed claim.
Closes the case with the appropriate close code if the client declines further action.

Debtor

Raising a legitimate dispute stops standard collection contact.
May be contacted under different terms if the client pursues a custom agreement or legal action.

Debitura

Facilitates communication between client and collection partner.
May distribute the case to additional partners if the original partner declines the disputed case.
Does not itself handle disputed claims or provide legal advice.