Commercial Debt Collection Agency
Businesses look for a commercial debt collection agency when they need to find a good avenue for addressing unpaid bills from customers and cannot address the problem themselves. Any company is driven by results, especially the bottom line, and no company can exist if the bottom line is not advantageous to the owner. Small business debt collection can include collections from returned checks, payroll overpayments, breached contracts, unpaid orders, and many other problems. What a company needs is a service provider that can offer a process that will expedite the returns and bring in the needed funds to continue running the company. When choosing a firm to represent these needs, the owner needs to make sure that the hired company is licensed to do this type of work and that it has years of experience in handling delinquent accounts. The firm should guarantee confidentiality to protect its clients and should work by the highest ethical standards. The personnel should be familiar with the latest technology in collecting debts and should use a single point of contact approach that helps the clients correspond and develop a trusting relationship.
An owner should feel that the commercial debt collection agency has the companys best interests at heart and will tailor the process of collecting debts to best serve the company. To increase recoveries, the serving personnel should be adept in financial services, telecommunications, government policies, insurance issues, while showing capabilities in workflow management software and communications networks. This operational expertise will minimize charge-offs and will increase recoveries. No matter if the client is in healthcare, retail industry, or insurance, the small business debt collection agency should be familiar enough with that area of commerce to give knowledgeable and competent service. The management system should serve as a highly scalable, flexible, and configurable system for the client. Therefore, it can reduce costs and fast-track collections and the rate at which they are collected. Some agencies will offer systems that can be used in-house or others that can be hosted from the companys data center.
By using a commercial debt collection agency, the astute business owner can tie into expertise that takes years to accrue. The effective collecting system will maintain the owners reputation and the companys image. It will also have a preventive maintenance strategy to accelerate cash flow and reducing write-offs. Most plans try to salvage a percentage of the write-offs after the problem has occurred. This can be expensive and some systems can alienate customers by putting prohibitive steps into the businesss way of doing business. Instead, small business debt collection should bring improvements in the businesss plan and minimize contingent fees or other expenses. When necessary, the company should know how to use decisive court action to recover the delinquent accounts.
Many times, a company will fail to act before the delinquent accounts disappear, making them impossible to pursue. Thats why its important to take action by hiring a commercial debt collection agency as soon as possible. The federal Fair Debt Collection Practices Act gives guidelines on how these debts can be pursued, so the agencies that offer this service should have expertise that compiles with this act. Some of the services that should be offered are wage and account garnishment, obtaining Writs of Execution, including sending out a court officer to seize and sell assets, serving subpoenas on the debtor, and obtaining Orders for Receivers. A receiver is someone who steps into the shoes of the debtor or a business and runs the debtors affairs. The receiver collects the assets of the debtor and pays funds to the creditor. These are all important aspects for small business debt collection, even though not all of them may be needed in each case. A good service company will also defend businesses in contract disputes and conflicts regarding the delivery and sale of goods and services. This may mean hiring a company that has a contingent of attorneys that represents the clients in all kinds of litigation. This may mean that the company will have contacts through which it can out-source the litigation rather than having these lawyers in-house.
How an owner conducts his affairs is a testimony to his character. Romans 12:17 says, Recompense no man evil for evil. Provide things honest in the sight of all men. This includes the type of agencies that present the owner in his affairs. This collaborator should know how to motivate debtors to pay delinquent accounts, have the proper technology and know-how to locate people who have skipped out on paying, and be quick to inform credit bureaus of credit problems with the owners clients. At the same time, the hired firm should act ethically in all facets of the recovery system so that the owners reputation remains intact. The fees charged should be adequately covered by the moneys recovered. Delinquent accounts can ruin any business, so small business debt collection can be the process that keeps a company from bankruptcy and failure. Also, a wise businessman or woman will attend to practices that minimize delinquency. For example, when dealing with customers, an owner should always be clear about credit policies to skirt any misunderstandings. When extending credit, the owner should know how reliable the customer is so that accounts are kept up-to-date and scrutinize accounts on a regular basis to note irregular payments on accounts. Very rarely, should he allow extended payments. Keep collection schedules short so that delinquencies do not languish. It is important to resolve all these matter quickly so that damages will not accrue unnecessarily.
Consumer Debt Collection AgencyWhen all else fails, a consumer debt collection agency may be a creditor's best ally in resolving delinquent accounts. Large and small businesses, hospitals, banks and finance companies, and retailers all have trouble collecting from debtors who are short on cash. As the economy continues to wane, consumers are less likely to honor financial obligations due to unemployment and increasing interest rates. Business owners and creditors who have exhausted all internal means of collecting may turn to a consumer debt collection agency, a highly competent firm skilled at persuading delinquent debtors to catch up past due payments. Debt recovery is not for the weak at heart, but persistent professionals can coax reluctant debtors to relinquish at least a settlement sum to satisfy creditors. Efforts may include personal contact, telephoning, writing letters, or faxing demands for payment. The agency represents the interests of the creditor who pays for services either at a specific hourly rate, on a per account basis, on commission only, or at a percentage. Payment arrangements may vary from agency to agency. Creditors may choose to use one company exclusively, or contract with several to handle different types of accounts. Once an agency has been unsuccessful in resolving accounts during the term of the contract, creditors may continue recovery efforts with other companies, relentlessly pursuing debtors until monies have been recouped or litigation becomes necessary.
No matter how persuasive, collectors are prohibited by the Fair Debt Collection Practices Act from using certain tactics. Agency personnel have heard every excuse and every sob story, but they are still charged with the responsibility of recovering past due monies in a professional and equitable manner. A consumer debt collection agency may not contact debtors before or after regular business hours, usually prior to 8:00 a.m. and after 9:00 p.m. Harassing phone calls, using profanity, speaking in a derogatory manner, or threatening to involve law enforcement are also prohibited. Even if a debtor reacts with profanity, sarcasm and insults, collectors should refrain from retaliating. Romans 12:17 says, "Recompense to no man evil for evil. Provide all things honest in the sight of all men." Some collectors may try to use strong-arm tactics to force debtors to action, but the FDCPA specifically prohibits threats of bodily harm; accusations of criminal charges; or threats to garnish wages, seize property, or sell assets to collect delinquent accounts, unless creditor contracts legally permit these actions. Agencies are also prohibited from calling debtors on the job or divulging to third parties the nature of calls. Should a debtor decide to file for bankruptcy, all recovery proceedings must legally cease upon the creditor's receipt of a notice of bankruptcy from the debtor's attorney.
Credit card debt collection presents other challenges to resolving delinquent accounts. The cardholder has the creditor's merchandise, but the creditor usually has no collateral and little chance of recovering payment. Credit card debt collection efforts are more difficult because revolving charges are unsecured. Businesses can go bankrupt extending credit to consumers who either refuse or are unable to pay. Unscrupulous debtors sometimes amass large amounts of credit card charges, but have no intention of paying little more than monthly finance fees. Other consumers simply fall on hard economic times and get behind on revolving charge accounts and installment payments. No matter what the reason for delinquency, creditors can either choose to collect or eventually go out of business.
Credit card debt collection requires specific debtor information on file before beginning recovery proceedings: first and last name; address, including city, state and zip code; place and address of employment; home and work telephone numbers; and precise account information. Collectors should be aware of actual purchase prices and dates, along with previous records of payment. Additionally, a log of prior attempts by business owners to recover payment gives collectors better insight into the debtor's financial situation and reason for delinquency. Debtors are not just faceless account numbers, but people with real life situations and circumstances that might have prevented them from keeping financial obligations. A consumer debt collection agency will have far greater success if debtors feel that collectors are there to help work out a reasonable plan to resolve indebtedness and satisfy creditors. Offers to arrange installment plans, defer payments, or reduce delinquent balances may meet with more cooperation than threats to repossess purchases or file lawsuits. Credit card debt collection may involve settling for a percentage of the unpaid balance, or reducing the unpaid balance; rather than risk losing an unsecured claim in bankruptcy court. The situations surrounding an individual debtor account will determine how credit card debt collection should be pursued.
To locate a qualified collections agency, creditors may browse the Internet, check out the local business directory, or ask other retailers, business associates and financing institutions to make recommendations. Reputable agencies should be licensed, bonded and insured. Creditors can also log onto the Secretary of state web site to see if an agency is incorporated and how long it has been in business. The Better Business Bureau may have a record of customer complaints or charges of violating the Fair Debt Collection Act. While creditors must collect delinquent accounts, the key is to employ an agency that deals fairly with customers and represents creditors in a professional manner. Creditors should avoid using aggressive tactics which may negatively impact customer relations. Being an entrepreneur is hard work and uncollected accounts can be a deterrent to success; but creditors don't have to face debtors alone. A highly qualified consumer debt collection agency can make all the difference between running a profitable business or barely breaking even.