debt collections, accounts retrievable system, erase bad debt, reduce expenses, debt collection agency, debt collection services, judgement collections, collecting child support, collect alimony

#baddebt #collections #money #debtcollection - Debt Collection Agency

Bank debt collection is a totally different animal than other kinds of collection for a variety of reasons. If you understand the basics of bank debt collection, you’ll be armed with the knowledge necessary to find a collection agency that understands your unique needs.

 

Bank debt collection means collections on mortgages, HELOCs, personal or commercial loans, auto loans, or credit card debt. The first few types, mortgages, HELOCs, and auto loans, are secured debt. Personal and commercial loans can be either secured or unsecured, and credit card debt is virtually always unsecured, with the exception of some credit cards for people with very bad credit that require them to make a deposit in the bank in the amount of the credit card limit.

 

Secured debt means that the bank has a claim on property tied to the loan if the consumer defaults on the loan. This means that they can repossess the car or foreclose on the house to make their money back. In practice, most banks would rather get their money than get the property, but the threat of losing the property means that consumers are more likely to keep their payments current on secured loans for as long as possible.

 

One fact you need to know when it comes to bank debt collection is that if customers haven’t paid by 60 days past the due date, they’re most likely not going to pay without prompting. When you come up to that signpost it’s time to hire a collection agency that understands this specific area of the collection business. This should be your first step in the process of collections, not your last, because most of these agencies don’t charge until they recover money for you. They have a better recovery record than in-house collections, and if they don’t collect there’s no fee, so there’s no risk.

 

Bank debt collection can get creative. For example, programs designed to help people dealing with financial difficulties are unique to this area of the collections industry. Such programs present the customer with a carrot rather than a stick. Instead of scaring them, they give the debtor incentive to try to make things better.

 

On the other hand, for secured debt, the techniques are very different. Whether you have an in-house collection department or use a collection agency that specializes in bank debt collection, you’ll want to approach the debtor differently. Financial hardship programs are common among secured loans like mortgages and car loans.

 

Financial hardship programs restructure the client’s payments in one way or another. They can defer payments and tack on the missing money to the principal, lengthen the loan terms (from, say, 30 years for a mortgage to 40 years), or switch the payments to interest only for a period of time.

 

Financial hardship programs help out both the institution and the borrower when it comes to bank debt collection. For this reason, any bank debt collection program should consider such methods of turning bad debt into debt recovery.

 

Article Source: David Montana – www.ezinearticles.com

 

Call Accounts Retrievable System For More Info at (800) 327-4687