The Best Debt Collection Methods

If you operate a small business, you probably spend a considerable amount of time on debt collection. You likely have uncollected funds from clients/customers that are making a difference to your company's cash flow.

Being owed money can affect your finances deeply, even causing you to go into debt with your creditors. This scenario is vicious, and when faced with it, many small business owners are not sure of the best way to recover the funds due them.

If you're facing this, you already know the frustrations that exist. You need to find the proper way to collect, as quickly as possible. So, what do you do to get on top of your receivables?

We can work with you to develop a contract which preserves your rights, and covers potential fees and expenses in the event that future collections are necessary.

If you feel like you need some help, call us and we will discuss it further. There is no cost or obligation for this initial consultation.

Hiring a debt collection attorney to assist you is a very smart choice, though many businesses do not realize they have the option of hiring an attorney instead of a collection agency. Or, even if they know about this option, they don't seriously consider it.

Why not go with a collection agency? Collection agencies are the middlemen, and when they are not able to collect on their accounts, they turn them over to a debt collection attorney.

Debtors are accustomed to the collection agency sending form letter after form letter, making phone call after phone call, and while collection agencies do find some successes in using these methods, when they fail, they will either declare the account as uncollectable or they will pass it on to an attorney.

This takes months. By skipping the collection agency, whatever payment you can get, you will receive faster. When you turn your unpaid debts over to an experienced collection attorney, you will likely find better results. This is because collection attorneys tend to be more aggressive in their approach, but in addition, they know collection law backward and forward.

This is instrumental to getting your money. They will be able to come up with an appropriate collection plan based on your personal situation with each debtor. They may choose to sue the debtor immediately, or they may try conventional routes first.

More people pay attention when an attorney contacts them than when a collection agency does. It immediately becomes more serious in the eyes of the debtor.

Debt Collection Practices

The Fair Debt Collection Practices Act, designed to protect consumers from harassment or intimidation, sets firm limits on what you can do to collect a debt from a consumer. The federal law even prohibits practices that were once standard, and that you might not consider harassment at all.

Besides, as a local business or individual, you have an even more powerful reason to be careful about debt collection issues. You have something much more valuable at stake - your reputation in the community.

Best Practices:

First, here are some of the "DON'Ts" to keep in mind when trying to collect a debt:

- Don't tell any third party about the debt (except collection bureaus, collection agencies, or the debtor's attorney).

- Don't call on the telephone 9 pm to 8 am, or calling repeatedly in a way that is annoying.

- Don't send postcards or envelopes that mention the debt.

- Don't make threats to take actions you cannot or will not really take, such as seizing property, in the case of an unsecured debt.

- Don't misrepresent yourself (e.g., "Hi! This is the Publisher's Clearinghouse Sweepstakes. May I speak to John?").

- Don't pay down the debt with payments the customer has directed be applied to other debts.

With all these limits, what can you do?

- Speak with the debtor personally on the telephone; most likely he or she wants to pay but is in over his or her head. Begin by asking what circumstance has kept him or her from paying. Offer to set up a repayment plan.

- You should both send letters and make telephone calls. Many people will only respond to one or the other.

- Document every part of the collections process. Take notes for each call and keep a copy of each letter - and get return receipts. If the debt does ever go to court, you will have proof you acted legally.

- Look into reporting the debt to credit bureaus. If you can, and are willing to do it, you can tell the debtor that not paying will impact his credit rating.

- Best tip of all: hand the collection over to a dedicated debt collection attorney. Collecting money isn't what you're in business to do. It's time consuming and annoying.

We recover debts through all of the processes available including garnishment, attachment, levy of assets, and foreclosure of security interests. We also represent lenders and leasing companies in connection with commercial and residential mortgage foreclosures, personal property repossessions, and creditor representation during bankruptcies.

We represent our clients on a contingency, retainer or hourly basis, depending on the type of debt and the preference of the client. If you believe the debtor will pay after being sued, you will maximize your recovery by paying by the hour.

If, instead, you believe the debtor will put up a battle and not pay quickly, you should pass the risk of the litigation to the attorneys and take the case on a contingency fee basis.

We typically charge a small retainer when a contingency fee is requested. We will also start a case on an hourly basis and consider converting it to a contingency fee basis if the client requests it.

Unfortunately, debt collections are a part of business. We know all the tactics debtors use to try to keep from paying what they owe you. We know how to stop the delay tactics.

We know how to fight for payment, plus legal fees, penalties, and interest when applicable. Our approach is as aggressive as the law will allow, while maintaining the highest standards of ethics and professionalism.

If you have a question about debt collection, contact me here.

For more about debt-recovery-solutions, click here.

And for no fault medical collections, click here.

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