Three Ways to Collect an Outstanding Debt

Author: Christine Harrell

No matter what measures you take to try and weed out potential non-paying customers, sooner or later one or more accounts are likely to become past due. When you find yourself with a past due account on your hands, the worst thing you can do is ignore the problem. The more time that passes between the payment due date and the time that the customer is contacted, the less likely you are to receive the full payment. After 6 months, you statistically collect only 50% of the amount due and after a year that amount drops to only 25% of the original debt. If you're serious about making a profit, there are three ways to handle collection on past debt; in house efforts, hiring a collection agency, or taking legal action.

Collecting the debt yourself:
If the debt is new or small, you'll probably start by trying to collect the debt yourself before hiring a collection agency or a lawyer. The most effective way to start the process of collecting an outstanding debt is by calling the debtor. Be firm, yet polite when you call. Make sure to keep records of the time, date, and resolution of the phone call. You'll want this information later should you decide to hire a collection agency or a lawyer.

Many nonpaying customers can talk a great talk on the phone, but then never deliver. If you get the "I have the check right here and will send it in the mail" line from a business customer more than once, tell them you'll send a courier service or someone from your office over to pick it up. If the business is local, try making an appointment with their finance manager to talk face to face.

Another effective way to motivate customers to make a payment is with a 10 day demand letter. Some collection agencies offer a free 10 day demand letter service that includes postage and mailing of a demand letter sent on official collection agency letterhead. Many times, this is enough to get your customer to part with their payment.

Hire a Collection Agency:
Many small businesses don't initially think of hiring a collection agency to collect an unpaid debt, but of the outsourced solutions, a collection agency is usually the most cost effective and gets the best results. When you consider the in-house time spent trying to keep on top of delinquent customers, a collection agency is often more cost effective than trying to handle it with your own staff.

With a collection agency, you don't pay until they collect the debt, meaning that the collection agency is highly motivated to find a way to get the customer to pay. Because they don't get paid unless you do, a collection agency tends to work fast, delete = "work at odd hours", and use all of it's professional resources to locate missing debtors.

Today's collection agencies don't use scare tactics or bully customers. That type of behavior is outdated and crosses the lines of legality. Besides, not all customers who are behind on payments are deadbeats. It's never wise in business to make enemies and gain a reputation as a brute force knee breaker for any customer who has a tough month. When you choose a collection agency, make sure one of its goals is to maintain extreme professionalism.

Taking legal action:
Another option to collecting a debt is to take legal action whether by taking the debtor to small claims court or by hiring a lawyer to pursue the debtor.

Article Source: http://www.articlesbase.com/finance-articles/three-ways-to-collect-an-outstanding-debt-65268.html

About the Author
The author is a freelance copywriter. For more information about what a collection agency can do for you, visit www.AABUSA.com.

Popularity: unranked [?]

Debt Collection Agencies : Understanding a Growth Industry

Author: Martin Mcallister

Consumers in the UK collectively owe in excess of £1 trillion according to recent media reports. Much of this debt is due to borrowing on credit cards, bank loans and mortgages; but as consumer borrowing increases, so does the amount of people encountering financial difficulty in paying back what they owe.

As a result, more and more financial agreements are becoming delinquent and are subsequently passed from the original lender to a debt collection agency. Debt collection agencies are businesses that collect past-due bills and accounts receivable for other persons or businesses in exchange for a fee. Collection agencies charge for their services in one of three ways: a flat fee, a percentage of the amount recouped, or more commonly through a direct purchase of the delinquent account.

Attempts to collect small or medium sized debts are best done using debt collection agencies that charge a flat fee for their services. These agencies are likely to work just as hard at collecting a small debt as they are in trying to collect a larger debt.

The third option is rapidly becoming the most popular among the larger financial institutions as they seek to cut their losses and free up resources away from debt collecting. In most cases, these financial institutions have large portfolios of outstanding debt, and selling it on to debt collection agencies allows them to recoup some of the money loaned out and free up costly resources away from chasing the delinquent debt.

In order to collect due debts most collection agencies will use one of three tactics: letters, telephone calls, litigation. Typically, debt collection agencies will begin the collection process by sending a series of notification letters, often allowing the debtor to enter into negotiations to repay the debt. These letters are often called ‘demand’ letters. The final notification letter that is sent out generally warns the debtor that if no contact is made prior to a certain date then the debtor’s name - whether it be an individual or a company – will be passed onto a more intensive method of debt collection.

In addition to letters, some collection agencies might also phone the debtor directly, again allowing the debtor to work with the agency to agree a plan to repay the debt. Telephoning a debtor at home can sometimes have the best results in collecting a delinquent debt. The third method, litigation, is a last resort and is generally only used when all other attempts to reclaim the debt have failed. Litigation involves taking the debtor to a small-claims court and could eventually result in the debtor being made bankrupt, depending on the amount of debt owed.

Other services provided by debt collection agencies include locating absent debtors who can no longer be reached at the address or telephone number listed on their accounts. Some agencies also offer ‘doorstep’ collection, whereby they employ a number of collectors to visit debtors in their homes to arrange the repayment of debts owed.

Debt purchasing is becoming big business in the UK with many specialist debt collection agencies, such as Capquest Debt Recovery, providing advice on how best to proceed with the recovery of unpaid debt. Should you have a need to employ the services of a debt collection agency make sure that they are members of the Credit Services Association, a regulatory body associated with the debt collection and financial industries.

Article Source: http://www.articlesbase.com/credit-articles/debt-collection-agencies-understanding-a-growth-industry-108392.html

About the Author

Capquest is a member of, and are regulated by the Credit Services Association.

Popularity: unranked [?]

Free Credit Repair Debt Consolidation

Author: Hector Milla

In the current economic times people are doing all that is possible to reduce the amount of debt they have.

Debt consolation has become very common. This can be explained as taking a single debt to pay the existing several debts that the individual may be having. This, however, does not mean that your debts have been cancelled.

Hector Milla Editor of the "Best Credit Repair Services" website -- http://www.BestCreditRepairServices.org -- pointed out;

“…You will need to pay this debt in a single controllable debt. It is a good ideal for people with good credit reports. It may, however, affect your credit report depending on the type of debt consolidation you take…”

In most cases, people seeking to take debt settlement loans have a bad credit report. It is therefore necessary that you consult the free credit repairing agencies before considering taking debt consolation. Debt settlement may affect your credit score positively or negatively depending on the type of debt consolation loan you take.

Generally you can repair your credit by ensuring that you pay your credit cards on time and making sure you do not add more to your debt by taking more of the credit cards. When considering debt consolation as a way of repairing your credit, it is tricky since closing credit cards might have an effect on the credit score.

At the same time if you keep more of your credit cards open it is an indicator that there is available credit hence it will increase your score. This will really confuse you and that’s why the services offered by credit repairing companies would be very necessary. Consult them for advice before considering taking debt consolation.

“…It has been noted that the effect on your credit score is entirely dependent on the type of debt consolidation that you decide to take. Debt settlement loans that make it possible for you to pay all your debt and still maintain your account will not affect the credit score in a negative way. On the other hand if the debt settlement maintains that you close the account it will affect them and at that negatively. Therefore look for free credit repair agencies to advice you on what to do…” added H. Milla.

Further information about how to secure a trusted and reputable credit repair service by visiting; http://www.BestCreditRepairServices.org

Article Source: http://www.articlesbase.com/credit-articles/free-credit-repair-debt-consolidation-1573529.html

About the Author

Hector Milla runs his corporate website at http://www.OpsRegs.com where you can see all his articles and press releases.

Popularity: unranked [?]

Allied Interstate Inc. is a collection agency not in the good books of most. It has gained popularity for various wrong reasons like faulty debt collection practices. They are known to have violated the Fair Debt Collection Practices Act (FTCPA) rules several times. They have been known to call individuals repeatedly for debts they do not owe. They have also been known to threat individuals if they refuse to pay them the money asked for.

There are umpteen complaints against this debt consolidation company. They have a long track record of harassing people and being rude with them.

Problem: Peter Smith has had several collection calls from 4 collection agencies. He was being harassed by all 4 of them to which he brought a stop with his cease and desist letter. Then one day Allied Interstate called for an individual's debt that was not Peter Smith. Allied was informed about the wrong call, but they took no heed and continue calling him several times a day despite telling them that it is the wrong number they are calling. The executive who calls does not give their address either and hence Peter has not been able to send then a registered letter.

Solution: According to Fair Debt Collection Practices Act "If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt."

Peter, the next time Allied Interstate calls you for a debt ask them to communicate with you in writing and not over the telephone. Ideally, they should have sent you a letter within 5 days of calling you for the debt that tells you that you have the right to seek debt validation. If they do not listen to your request, you do not have to listen to theirs either.

I would suggest try and Google their address out and send them a 'cease and desist' letter. This should stop Allied Interstate Inc. from calling you further for the debt. However, if they continue to call you will have the right to seek punitive action against them. The FDCPA has strict guidelines related to debt collection practices to be followed by debt collectors. Make yourself aware of these guidelines, violating which can get the collection agencies in to trouble. Peter you have the right to take action against debt collection practices that violate FDCPA.

Here are 3 steps you can immediately take if they persist calling you:

• File a complaint with your state attorney general

• File a complaint with the FTC

• File a complaint with the Better Business Bureau

• File a civil suit in your federal or state court

When you file complaints you will need evidence. So, if Allied is communicating with you only through phone, tell them that you are recording their call and do record the call.

Allied Interstate is popular for its notorious ways of seeking debt collection. They are known to:

• Constantly call to harass people with false collection calls.

• Be rude when they call individuals for any debt.

• Refuse to provide any contact details when asked.

• Not identify themselves properly when calling an individual regarding a debt.

• Not stop calling even if the debtor asks them to saying that they are violating FDCPA rules.

• Review credit reports without permission.

• Call at weird times of the day when the individual has already restricted the time to call for debt collection.

Popularity: 12% [?]

Primarily collection agencies work through letters and telephone calls. Third-party collection agencies party basically works on commission basis.In which they receive a percentage of the amount that they collect.These agencies offer services to lending companies such as credit card firms, insurance firms, healthcare providers, automotive firms, financial institutions, banks and utility service providers like telecom and electric.Some agencies even purchase large groups of charged-off bad debts for a small percentage of the "face value". After the debt is sold, the debtor now owes the full amount to the purchaser. Collection companies main task is may not only offering due accounts recovery but also help with financial solutions as well as loss prevention. Collection agencies work with the lending corporations and would recommend the most appropriate approaches for successful collections of due accounts. It may not only offer due accounts recovery but also help with financial solutions as well as loss prevention.

What is Collection Agency?

Collection Agencies are the type of business which pursues payments on dept owed by individuals or business. Mostly Collection Agencies act as agents of creditors and collect debts for a fee or percentage of total amount owed. Collection agencies are well recognized and sanctioned business entity. The main task of collection agencies is to collect debts owed to its mother company by its company’s customers. There are two types of collection agencies (a) first party agency and (b) third party agencies. In first party agencies the company is get involved earlier in the debt collection process and have a greater incentive to try to maintain a constructive customer relationship. In Third party agencies the  creditor assigns accounts directly to such an agency on a contingency-fee basis, The term collection agency is usually applied to third-party agencies, called such because they were not a party to the original contract. Most of the collection agencies have lawyers who file a case at the court to force the debtor to meet his or her obligations. This is done in a hope that the receipt of legal documentations would induce the debtor to make a payment on the debt due or at least make efforts to communicate with the creditor for a repayment plan. Collection agencies try to use all the available resources to track down debtors.

Popularity: unranked [?]