Nowadays, more businesses need an extra hand to solve their debt collection problems. That’s why the needs of Debt Collectors are increasing annually based on the latest statistics. Debt collection is a bit tricky to operate, especially for those individuals who don’t have any experience of collecting debts. There are hundreds of laws to be […]
Nowadays, more businesses need an extra hand to solve their debt collection problems. That’s why the needs of Debt Collectors are increasing annually based on the latest statistics. Debt collection is a bit tricky to operate, especially for those individuals who don’t have any experience of collecting debts.
There are hundreds of laws to be considered, and all of these vary from state to state, and of course, laws are meant to be respected, especially when collecting past-due accounts.
In debt collections, some dos and don’ts need to be followed.
Do: Ask for Help from as Third-party
Most of the time, many business owners believe that it is cheaper to collect debt on their own, but in reality, it is riskier and trickier compared to asking for help from a debt collection agency.
Remember, outsourcing is the enemy here, but the debtors are!
True, there are decisions that you could do about what jobs you can handle by yourself or tasks that need to be done by others. Don’t worry, small businesses and even corporations do that as well.
However, when talking about hiring a collection partner, more companies are holding too many delinquent accounts unresolved. The result? Lower chances of acquiring the money back. So, how can you prevent this from happening?
As you may know, many debt collection agencies have strategies and options to collect debt in advance, such as skip tracing. It is a process of finding a debtor who skipped or left the town without notice.
Generally, this process is helpful for most cases in which a debtor hasn’t answered multiple repeated calls, letters, or emails.
Don’t: Collect Debts without Having the Correct Knowledge
As you may know, there are hundreds of laws that can protect debtors; any wrongful acts that come from you can be used against you. Day by day, debtors become wiser more than what you can imagine, they won’t hesitate to sue you and make the odds favorable for them rather than you, the creditor.
In short, do not collect any unpaid invoices on your own; don’t forget to bring or hire Debt Collectors to the job for you. They are experts when it comes to debts; they know all the laws that will surely help you to acquire your money in a right way.
Do: Create a Plan Before it Happens
It is always a better idea to be prepared for the worst before it happens. For debt collection, you need to have a plan ready for delinquent accounts. Creating a plan in advance will help you to ease the process.
It includes credit agreement that gives provisions for lawyer’s fees, late charges, and interest and highest rate. For you to recover the lawyer’s fee, courts will need you to have a written agreement signed by an authorized representative of the client. If you have this document in advance, you can make the litigation process easier.
Don’t: Harassing and Threatening Your Delinquent Clients
Some laws limit the action and behavior of all third-party debt collectors who collect debts on behalf of an individual or entity. In short, there are laws created to protect debtors from unfair, deceptive, and abusive debt collectors.
However, against the common belief, the law only protects individual debtors (consumer) and not the commercial debtors (businesses, corporations, and companies). Though there are no laws when it comes to commercial debt collection, and most states have their statutes that need to be ruled out when it comes to debt collection.