Debt Recovery
Recover Smarter: Faster, More Targeted, More Profitable
In debt recovery, not all receivables are equal—some have a high potential for recovery, while others are more uncertain. At ARM, we don’t leave performance to chance. We’ve developed a predictive and systematic approach that identifies receivables with the highest conversion rates and focuses efforts where they generate the most value.
Why is ARM the strategic choice for creditors with large portfolios?
➡ Continuous Screening and Profiling
We update debtor information daily thanks to our access to credit bureaus. Our advanced profiling intelligence enables us to target the most promising contacts, increasing success rates from the first interaction.
➡ Maximized Liquidation and Accelerated Cash Flow
Our methodology prioritizes profitability by focusing efforts on the receivables most likely to be collected quickly. The result? Fewer losses, higher returns on investment.
➡ Structured and Responsive Recovery: A System Designed to Prevent Lost Opportunities
Each receivable follows a structured path, always directed toward the most effective action. Thanks to our intelligent automated tracking system, no case is forgotten. Even in the case of a temporary failure, a strategic follow-up is planned to maximize every recovery opportunity.
Do you manage a portfolio of receivables and seek to optimize your results?
We work with financial managers, accountants, controllers, and decision-makers to maximize the profitability of their receivables through a methodical and proven approach.
➡ Speak with a sales representative to determine if our solution aligns with your needs, or continue reading to learn more about our recovery methodology.
From Assignment to Resolution – The Typical Debt Recovery Process
Debt Assignment – Success Starts with Preparation
Once your receivables are assigned via our self-service platform, our systematic screening process is immediately triggered. Within 24 to 48 business hours, we update all available information from credit bureaus and other relevant sources.
Why is this step crucial?
- Identify the most up-to-date contact details of the debtor.
- Assess their solvency to determine the best recovery strategies.
This precision work fuels one of our most powerful strategic tools: the ARM Probability Index (IPA). Thanks to our advanced technology and expert analysts, we have established ourselves as a key player in debt recovery across Canada, with a strong presence in Quebec, Ontario, and the Maritime provinces.
The ARM Probability Index (IPA): Prioritizing for Smarter Recovery
The IPA is a proprietary predictive tool, developed by our analysts and continuously refined. Its purpose? To identify the receivables most likely to be recovered and adjust our strategies accordingly. Unlike generic market indices, our IPA is recalculated daily and relies on over 30 weighted and classified metrics across three categories:
- Key Debtor Information: Contact details (phone, email, address), age, and interaction history.
- Payment Capacity: Commercial credit scores, payment history, borrowing capacity.
- Recovery Action Outcomes: Analysis of trends based on past contacts and actions.
How the IPA Guides Our Strategies
➡ HIGH IPA → Proactive and Targeted Approach
Assigned to our top agents for maximum liquidation potential.
➡ MEDIUM IPA → Balance Between Automation and Human Intervention
Integrated into predictive call campaigns to optimize volume handling.
➡ LOW IPA → Reactive and Omnichannel Strategies
Recovery efforts through SMS, emails, and Text-to-Speech, maintaining contact while optimizing resources.
When Technology Meets Human Expertise
Data alone doesn’t tell the whole story. Our agents, trained to handle complex situations, step in at key moments to adjust strategies and ensure a tailored follow-up for each debtor.
Why This Hybrid Approach?
✔ Technology efficiently handles high volumes and optimizes prioritization.
✔ Human expertise ensures appropriate communication and the management of sensitive cases.
✔ This combination guarantees a rigorous, ethical, and high-performing recovery process, all while preserving your business relationships.
A Clear Path to Predictable Results
In compliance with provincial and territorial legislative frameworks, ARM initiates each recovery mandate by sending a claim notice to the debtor. This notice informs them of the outstanding debt and our role as the appointed collection agency.
After a short regulatory period allowing for the reception of this notice, a follow-up SMS is sent, and each receivable is integrated into a targeted contact campaign, defined according to its ARM Probability Index (IPA).
At this stage, several predictable scenarios may unfold:
Full Payment
This is the ideal outcome for all parties. Around 20% of recoverable receivables are resolved following the claim notice.
➡ For debtors who do not settle immediately, our contact campaigns aim to establish a constructive dialogue. Our agents, trained to handle sensitive discussions, facilitate the quick and full resolution of the debt.
Installment or Partial Payment
Some debtors, either unable or unwilling to pay their debt in full, require advanced negotiation skills to reach an agreement.
➡ Our agents work to negotiate settlements in line with the creditor’s parameters, maximizing the profitability of each interaction, while optimizing cash flow speed and overall liquidation rates.
Refusal to Pay
Some debtors refuse any payment or communication, at least temporarily.
➡ These interactions, documented in our system, lower the IPA and adjust future recovery strategies.
Dispute and Litigation
When a debtor partially or fully disputes the claim, our agents apply our mediation approach to defuse conflicts.
➡ We collaborate with all relevant parties to find a suitable resolution, ensuring a fair outcome.
➡ Strict regulatory framework: This scenario is well-defined under provincial laws, and our representatives are trained to operate within full regulatory compliance.
Exhaustion of Contact Information
If a debtor remains unreachable, we continuously monitor credit bureaus and other sources to update their contact details.
Bankruptcy, Consumer Proposal, or Business Closure
In some cases, external events (bankruptcy, death with no succession, business closure) require us to pause or permanently discontinue collection efforts.
A Mediation-Based Approach at the Heart of our Process
ARM stands out for its mediation-based approach, which places respect, dignity, and consideration at the core of every interaction.
Adopted several years ago, in contrast to traditional collection practices, this approach has now become a benchmark in the Canadian industry, reshaping the experience and perception of debt recovery.
What does this look like in practice?
- Debt Positioning and Enforceability
➡ Clear and confident communication about the validity of the debt and the next steps toward resolution.- Conversation Control
➡ Each exchange is structured to remain focused on the debt while promoting active listening to better understand the debtor.- Identifying Reasons for Non-Payment (When Facing Resistance)
➡ Our agents pinpoint objections and specific barriers to payment to propose tailored solutions.- Dispute Management
➡ When objections are raised, we assess their legitimacy and work with the relevant parties to reach an acceptable resolution.
Maximizing Impact from the First Interactions
This initial phase of the recovery process is essential. It allows us to:
✔ Clearly notify the debtor of the debt and demonstrate the creditor’s chosen course of action.
✔ Quickly resolve most recoverable receivables, thanks to our rigorous methodology and omnichannel communication strategies (claim notice, SMS, emails, calls).
✔ Preserve your business relationships while maximizing results.
ARM guarantees a human, professional, and strategic approach, ensuring efficient and ethical debt recovery management.
Reactive Phase: Maximizing Liquidation
Even in the most promising portfolios, a significant portion of receivables remains unpaid despite rigorous initial efforts. At this stage, ARM adopts a reactive approach, aiming to optimize remaining opportunities while controlling costs and mitigating reputational and legal risks.
Our strategy focuses on:
✔ Keeping the debt active in the debtor’s mind.
✔ Protecting the creditor’s rights.
✔ Preserving and updating contact information.
✔ Monitoring financial changes that could reopen recovery opportunities.
Additionally, reporting the debt to credit bureaus serves as a powerful lever and an additional communication channel, encouraging repayment—especially when the debtor seeks to restore their financial standing.
Main Challenges Encountered
- Uncooperative Debtor
➡ Some debtors refuse to pay, justifying their position on personal or ethical grounds.
- Financially Constrained Debtor
➡ Others wish to settle their debt but are currently unable to do so due to financial difficulties, a situation often exacerbated during times of economic uncertainty.
- Insufficient Contact Information
➡ In approximately 25% of cases, the available information no longer allows us to reach the debtor. ARM then conducts further searches through internal and external sources to find updated contact details.
Actions Taken during this Phase
- Debt Reporting to Credit Bureaus
➡ We report the debt to Equifax and TransUnion, directly affecting the debtor’s credit score.
➡ This action serves both as a distinct communication method and a strong incentive, particularly when the debtor seeks to obtain financing, rent a property, or secure a job.
- Reminders and Settlement Offers
➡ Using automated communication tools (emails, texts, text-to-speech messages), ARM reminds the debtor of the outstanding debt.
➡ These reminders may include pre-approved settlement offers, negotiated with the creditor, to encourage debtor engagement.
- Continuous Financial Monitoring
➡ ARM actively and continuously monitors updates from credit bureaus and other financial indicators, such as new employment or an improved borrowing capacity.
➡ These financial signals help us identify the right time to reinitiate collection efforts effectively.
Specifics of Commercial Receivables
For commercial receivables, this phase often marks the end of amicable collection efforts.
If contact attempts remain unsuccessful or unresolved disputes persist, ARM advises considering:
✔ Legal action, depending on the case’s profitability and the interests of all parties.
✔ Strategic write-off, if the receivable shows low recovery potential or clear signs of insolvency.
Continuation of the recovery Mandate
Once the minimum assignment period of one year has passed, even if the likelihood of recovery decreases, ARM continues to adapt its strategies to maximize your chances of debt collection.
If not already done, the creditor may also choose to pre-authorize a partial settlement, allowing the case to be closed for a reduced amount compared to the initial claim.
When time becomes a critical factor, it is essential to understand the legal limitations surrounding debt recovery.
Statute of Limitations: Recovery and Rights Protection
The statute of limitations for debts varies by province and territory in Canada, generally ranging from 2 to 6 years. It defines the timeframe during which a creditor can initiate legal action to obtain a favorable judgment.
➡ Once this period expires, the creditor loses their legal right to pursue the debt in court.
To protect your rights, it is highly recommended to research the applicable statutes for your debts and take appropriate action.
ARM encourages you to consult legal resources or seek expert advice to obtain guidance tailored to your specific situation.
Obtaining a Judgment: A Lever to Protect your Rights
Securing a favorable court decision is a key step in protecting your rights and maximizing your chances of recovery.
✔ In several jurisdictions, a judgment can extend the legal recovery period up to 10 years, with renewal options depending on the applicable regulations.
✔ Since these rules vary across regions, it is advisable to verify them with the appropriate legal authority.
Before initiating this process, it is essential to assess:
- The value of the receivable and its potential for recovery.
- The financial costs and risks associated with legal proceedings and the debtor’s solvency.
- The potential benefits and the probability of liquidating a judgment in the medium or long term.
Options after Obtaining a Judgment
Judicial Enforcement
- A forced execution may be applied according to local procedures, including:
✔ Wage garnishments.
✔ Bank account seizures.
✔ Other legal actions specific to the jurisdiction.
- Judgment Sale
✔ Some creditors opt to sell their judgment to investors, allowing them to recover a portion of their receivable immediately without managing future enforcement actions.
- Judgment Management with ARM
✔ ARM takes full charge of your judgment management, minimizing financial risks and maximizing long-term recovery potential.
✔ A simplified process that optimizes your results.
These strategic options significantly increase the probability of liquidating a debt.
Collecting on a Time-Barred Debt: A Final Opportunity for Settlement
Although a time-barred debt is no longer legally enforceable, ARM can still assist you in pursuing amicable recovery efforts in most jurisdictions.
A time-barred debt remains morally owed and can be subject to incentive-based settlement offers, proposed without legal constraints to the debtor.
A strategic approach to maximize recovery
✔ Some creditors assign an inventory of time-barred accounts to maximize the liquidation of their portfolios.
✔ A common approach is to offer a settlement at a lower percentage of the original amount.
✔ These offers allow creditors to recover cash flow while providing debtors an opportunity to restore their financial situation.
➡ A reduced settlement offer may be enough to trigger a spontaneous payment, resulting in a positive outcome for all parties.
End of Amicable Collection and Strategic Integration of the Recovery Service
ARM rarely closes a case permanently unless required to do so. While debts are most likely to be recovered in the first few months after assignment, a significant portion of recoveries still occur several years later.
Notably, derogatory notes reported by ARM generally remain visible for up to six years, serving as a strong incentive for resolution during that period.
Thus, ARM collaborates with its clients to integrate our external recovery solution into their overall receivables management strategy, helping them achieve long-term financial objectives.