When your debtor pays only part of what they owe, the amount you receive is not simply the recovered principal less your success fee. Each payment is divided between you and your collection partner in proportion to what each side is still owed, which is why a partial recovery can leave you with slightly less than you expected.
What it is
Two parties have a financial claim on the money your collection partner recovers.
You are owed the outstanding principal of your claim, less the success fee. The success fee is charged on the principal only, never on the fees your partner adds to the debt.
Your collection partner is owed the success fee, plus any interest, collection fees and reminder fees they were legally entitled to add to the debt in the debtor's country. Those additional fees are charged to the debtor and kept by the partner as extra compensation, so they never come out of your pocket.
Together those two amounts make up the full sum your partner is trying to collect. When the debtor pays all of it, you receive exactly the principal less the success fee. When the debtor pays only part of it, the shortfall does not fall on one side alone.
Why it matters
Most clients reconcile a recovery by taking the principal and subtracting the success fee. That calculation is correct only when the debtor settles the claim in full.
On a partial recovery, the amount your partner remits will be lower than that figure, and the difference is not an error or an extra charge. It is your proportional share of the amount the debtor never paid. Knowing this in advance saves a reconciliation query later, and tells you what to look for on the remittance statement.
How the split works
Every payment received from the debtor is allocated pro-rata between you and your collection partner, based on what each side is still owed at the moment that payment arrives. This is set out in section 05.4 of the Standard Debt Collection Agreement (SDCA).
In practice the platform does three things for each payment:
Works out what you are still owed (the outstanding principal less the success fee) and what your partner is still owed (the success fee plus any additional fees added to the debt).
Adds those two figures together to get the total still collectible on the case.
Divides the payment between you in the same proportion. If the payment covers everything outstanding, each side simply receives its full remaining balance.
The partner's share is rounded to two decimals and you receive the remainder, so the two shares always add up to exactly the amount the debtor paid. Each disbursement comes with a remittance statement setting out the recovered amount, the success fee rate and amount, any additional fees retained, and the net amount remitted to you.
A worked example
Take a claim with a principal of EUR 10,000 and a success fee of 10 percent. Your partner adds EUR 1,000 in collection fees to the debtor's balance, so the debtor now owes EUR 11,000 in total.
Component | Amount |
Principal | EUR 10,000 |
Success fee (10 percent of the principal) | EUR 1,000 |
Collection fees added to the debtor's balance | EUR 1,000 |
Total the debtor owes | EUR 11,000 |
Of that EUR 11,000, you are owed EUR 9,000 (the principal less the success fee) and your partner is owed EUR 2,000 (the success fee plus the collection fees).
Now suppose the debtor pays EUR 8,800 and nothing more. That is 80 percent of what was owed, so each side receives 80 percent of its entitlement: you receive EUR 7,200 and your partner retains EUR 1,600.
If you had expected the principal less the success fee, you would have looked for EUR 9,000. The EUR 2,200 the debtor never paid is shared in the same proportion: EUR 1,800 of it falls on your side and EUR 400 on your partner's. Nothing has been deducted twice, and no fee has been charged to you beyond the success fee.
What to expect
You only ever pay a success fee on money that is actually recovered. If nothing is collected, no success fee arises.
Additional fees added to the debt are payable by the debtor and retained by your partner. They are never invoiced to you.
If the debtor settles the claim in full, the pro-rata rule makes no difference: you receive the principal less the success fee, exactly as expected.
The same rule governs instalments. See installment plans for how those arrangements work and when your approval is required.
Your partner remits your share within 30 business days of the recovery. If a figure on a remittance statement does not look right, raise it with your collection partner through the case chat, since the invoice and the disbursement are theirs.
If anything in this article conflicts with the Standard Debt Collection Agreement, the SDCA prevails.