Customer bills that are unpaid after the terms that were set are considered past due accounts. Many business owners and managers have a billing processes, but no process for collecting on past due accounts.
One of the biggest dilemmas small business owners face when managing a business in collecting on past-due accounts. Why, do we have a fear of contacting clients or customers who owe us money? Most business owners avoid calling a client of customer on a past-due account, they prefer to send a letter, which do not bring results. Here are a few step to collecting on past due accounts.
1. Once an invoice has been sent to the client or customer, and payment has not been made with in the terms. Give the client or customer a professional courtesy call to confirm that they received the invoice.
2. After 1 week if payment has not been paid, place another professional courtesy call, advising that the payment still has not been received, be sure to ask when payment will be send, the check number and amount of check.
3. Send out a demand letter immediately after call.
4. Contact a reputable collection agency who specializes in collecting on business accounts for past due account over 90 days.
Constant communication trains customers to pay bills promptly and establishes an efficient, professional relationship between you and them.
Be sure to view your accounts receivable aging reports periodically to avoid delaying the contact of past due accounts.
Bonus Tip: Be consistent, don’t hesitate, the longer you wait to contact, the harder it would be to collect.
If your financial problems have grown from too much debt or your inability to repay your debts, a credit counseling agency may suggest that you sign up for a debt management plan (DMP). Only enroll in one of these plans after a certified credit counselor has thoroughly reviewed your financial situation, offered you detailed advice on money management, and determined that this is the best debt consolidation tactic. Only make payments into your DMP when your creditors have accepted you into the program.
When in a DMP, you work towards debt consolidation by depositing money every month with the credit counseling organization, which uses your deposits to pay your unsecured debts. Your credit counselor should estimate how long it will take to complete your DMP and ask if you are permitted to apply for or use additional credit while you are enrolled in the DMP. It is important to know that even with regular, timely payments; your DMP could take more than four years to complete.
7. Debt Consolidation
Acquiring a second mortgage or a home equity line of credit may be attractive debt consolidation options as well. These loans can help lower your cost of credit and might result in unique tax advantages. However, you risk losing your home because you are putting your home up as collateral. So it is very important to not make late payments or fail to make them at all. In addition, not only do you have to pay interest on these loans, but you might have to pay “points.” One point is equivalent to one percent of your borrowed amount, and these fees add up over time.
8. Bankruptcy
Personal bankruptcy should be a last resort in debt management and debt consolidation. If and only if you have exhausted all of your other options, you can declare bankruptcy. This gives you a court order saying you are no longer responsible for paying off certain debts. On the other hand, bankruptcy information remains on your credit report for 10 years. This can be a major roadblock in obtaining credit, purchasing a home, securing life insurance, or even getting a job.
Debt consolidation may seem like an overwhelming task, but you have to be proactive if you want to get your finances in order. No matter how bad your financial situation is remember there is hope. There are a number of realistic ways to improve it, or at least to make sure it does not get any worse and begin your debt consolidation. Use this information as a guideline for getting back on the right financial path and take your first step towards debt consolidation today.
Are you in debt and feel trapped? Even though your situation may be overwhelming and gradually more stressful, there is no reason it has to get worse. Has the thought of debt consolidation ever crossed your mind? There are many practical options available for you to help improve your financial situation and start you on the road to becoming debt free.
Depending on how much money you owe, how disciplined you are, and what your future options consist of are all variables to help you find the best debt consolidation solution for you. Consider the following, and remember it is very important to do your homework before starting down the road to debt consolidation.
1. Create a Budget
The first step towards debt consolidation is assessing how much money you bring in versus how much money you spend. Begin by determining the total amount you take, and then list your usual monthly expenses such as mortgage payments or rent, car payments, insurance, etc. Once this is completed, you can now move onto the more complicated task of listing your variable expenses such as entertainment, recreation, and clothing. By having a written list of all your expenses can help you identify your spending patterns and make debt consolidation much more realistic.
2. Get in Touch with Your Creditors for Debt Consolidation
After you have a structured budget in place, contact your creditors and explain why you are having financial problems. Then, you can work together to create a customized payment plan that is manageable for you. This step is vital on the road to debt consolidation. Ignoring your creditors, will result in your accounts being passed on to a debt collector.
3. Debt Collectors
If you have been contacted by debt collectors already, there are a few important things you should know. According to the Fair Debt Collection Practices Act, a debt collector may not call you before 8 a.m., after 9 p.m., or while you’re at work. Collectors must honor a written request from you to cease contact and are not permitted to harass you or lie.
4. Home and Car Loans
In order to understand debt consolidation, you should know that there are two kinds of debt: unsecured and secured. Unsecured debts — like credit card debts, signature loans, and debts for services — are not tied to any asset. Secured debts may tie your car to your car loan or your house to your mortgage. Failure to make your payments, your car faces repossession and your house could be foreclosed.
The majority of automobile financing contracts allow a creditor to repossess your car any time without any notice if you’re in default. In order to get your car back, you may have to pay the balance due on the loan plus towing and storage costs. Failure to do this can result in the creditor selling the car. If you know you are unable to make your car payments, you might be better off selling the car to pay off your debt and avoid repossession expenses and a blemish on your credit report.
If you find yourself falling behind on your mortgage payments, get in touch with your lender immediately to avoid foreclosure. Many lenders will work with you if you seem honest and the situation is temporary. Some lenders may temporarily cut or suspend your payments, but you may have to pay extra towards your past due total when you resume regular payments. Another option is to have your lender alter your mortgage by extending the repayment period. It is important to ask whether there are additional fees for these changes. If so, figure out how much they will be in the long run so that it does not negatively affect your debt consolidation.
5. Credit Counseling for Debt Consolidation
If the methods above were unsuccessful, consider contacting a credit counseling organization to fix your financial troubles. Highly regarded credit advisors are certified and trained in the areas of consumer credit, money and debt management, and budgeting. They can help you develop a personalized plan for debt consolidation. Though many credit counseling organizations are nonprofit, their services may not be free, cheap, or even legitimate, so do your research. Steer clear of any organizations that try to pressure you into making “voluntary contributions,” will not send you free information about their debt consolidation services, or charge high up-front or monthly fees.
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.
Divorcing individuals usually come across the possibility of paying or receiving spousal support (also called alimony). This can make a serious impact on your financial situation, and – depending on the length of time you were married – on your ability to support yourself in the future.
If you or someone dear to you is going through a divorce and would like more information about alimony payments, you should consider contacting an experienced attorney to understand your legal options.
Types of Alimony Payments
Alimony agreements differ depending on your living and earning situations, and those of your spouse. Some of the most common include:
– Temporary Alimony: The judge may award temporary alimony payments if a divorce has been initiated and not yet finalized.
– Permanent Alimony: Prolonged economic dependence and sustained contribution to a marriage call for a permanent alimony arrangement.
– Modifying Alimony: A change in circumstances may justify a change in alimony payments, such as loss of employment, the remarriage of the spouse receiving payments, or another serious change in circumstances.
Spousal support is obviously an issue that can become quite contentious. If you will be paying alimony, you may understandably be concerned with minimizing the amount you have to pay. Similarly, if you are to be receiving alimony payments, you may be concerned with maximizing the size of the payments you are to receive. Either way, it is in your interest to seek legal counsel and make sure you do what is right for you. An experienced attorney may be able to work with you to secure an agreement you can be happy with.
When dividing two lives apart, divorce can sometimes be extremely difficult financially. Being awarded alimony can sometimes help to relieve this financial burden. The following is what you should know about divorce and alimony.
Sometimes one spouse relies heavily on their partner to support them, and divorce can be like pulling the ground out from under them. When a court decides that a couple has an obligation to support each other during a marriage, they can mandate that payments be made to the suffering party. Unlike child support, this is treated as income and is subject to tax deductions.
Each state has different laws surrounding this. Some require that a couple be married for a specific period of time for a payment order to be issued. In some places, it can only be paid for a certain amount of time, like half the amount of time the couple was married. Certain states have limitations on how much can be paid, whether it be a number or a percentage of income. Though there are very specific laws regarding this in many states, some still have very vague stipulations. In these states, the decision surrounding it is left largely up to the judge.
It is important to understand that there are almost no circumstances that cause a person to be exempt from payments once they have been court ordered. Even if the person required to pay files for bankruptcy, they are still responsible for making payments to their ex-spouse. If someone is delinquent in their payments, their ex-spouse can report them to a collection agency and they will then go into debt.
Alimony is often demanded from a spouse during a divorce. There are a lot of different laws when it comes to alimony payments. Understanding what you should know about divorce and alimony will help to have the most desirable result possible.
In New Jersey, your wages from your workplace can be served if you are the non custodial parent. The wage garnishment can include child support and spousal support better known as alimony. The wage garnishment will come out pre tax out of your net pay.
It’s important to recognize the collection of child support continues even in the event that a worker is no longer able to work and receives his or her pay through workers compensation or disability insurance. New Jersey recognizes child support as the right of the child, it is not the right of the non custodial parent.
When a workplace has been served by having a wage garnishment order, the workplace should describe any sort of changes in the non custodial parent’s employment condition to the issuing agency. Extra info on New Jersey child support assortment is provided below.
New Jersey Child Support Collection
Because New Jersey sees child support as the right of the child, and further more requires non custodial parents to protect that right, by judgement, order and decree, (not necessarily in that order) the state requires, non custodial parents to provide for expenses that are normal and necessary for taking care of a child and other costs associated with that care. Depending on the case, the order of child support may include spousal support, better known as alimony. A typical order of support will provide for the payment of the child support for financial support, child support arrearage, health care or compensation for support paid. The child support may also include lawyer fees.
That Withholds the Money
When an employer or human resource administrator gets an order for support against their worker, they should impose the order. The New Jersey definition of “employer” is offered by area 3401 (d) of the Internal Income Code, and integrates any sort of labor organization and or governmental entity. A human resource administrator or employer of further sources of repayments, from sources such as; 401k plans, pension plans, worker’s compensation, sick pay insurance. In the event that employees under a child support order become eligible for benefits, such as disability or workers compensation, the employer or human resource administrator must forward all orders of disability or workman’s compensation insurance to the New Jersey’s probation department, when the claim is to be filed. This may be a certified true copy.
When is Money Withheld
When a company receives a support order for one of their workers, they should begin withholding on the next payday following the date on the order for support. The employer is responsible, by court order, and is obligated to remit payment of withholding, each and every payday. Repayment of child support can be made through EFT which is digitally transfers monies in Money Concentration and Disbursement (CCD +) format or by Corporate Trade Exchange (CTX) format or they can be remitted by check. A New Jersey workplace with greater than one worker that is subject to a support order can blend repayments for all of them. When the company blends payments, they should determine the amount owed by each worker, along with their names, case, number, and pay day date. The company must withhold and remit each pay day, implying that a New Jersey company can not collect withholdings to make one month-to-month repayment.
Orders Of Child Support That Are Out Of State
The state of New Jersey participates and observes guidelines form UIFSA which is the uniform interstate family support act. This act mandates companies to uphold and honor orders of support that they are served with, even if that order comes from out of state.
By companies doing their part and honoring and upholding out of state court orders of support, the employer should be able to keep up with and follow both the employee’s work state laws and the laws of the issuing state. When figuring out the period of the order, the amount to withhold, and where to remit payment, the company really should look to the releasing state’s laws. When determining the withholding limitations, exactly, what is included and defined as earnings that are disposable, and deductions, and when to begin and remit holding, the workplace must follow the laws of the state where the worker works.
For many families, child support is essential for their month to month survival. Enforcing this form of support is one of the most vital functions of the courts and an extremely important use of their power. Because of the crucial nature of child support payments for many families, some states are able to extend their jurisdiction to nonresidents in order to collect child support payment. For single parents or any other family that receives child support, the need is real and the courts should be able to uphold an action that they have decreed.
Some states have jurisdiction over residents of other states, or nonresidents, because of the actions or orders that were brought against them in that state. Financial support for children is one of those actions. Parents who are attempting to flee their responsibility can not escape by simply leaving the state. States have outlined regulations regarding who and how they can pursue the collection of support from nonresidents.
A nonresident of a state can still be served with a support collection action if they are in the state. So if a fleeing parent establishes residency in another state, but comes back to the state where they owe financial support to a child, they can be served with an action to collect their overdue payment. Also, if a nonresident ever resided with the child whose support the are supposed to pay, they can be served with an action by that state. Finally, if a child was conceived in a state that a person is not a resident of, they can still be within the jurisdiction of that state in regards to support payments.
Divorce is never a comfortable or easy subject to explain to children, neither are custody issues. Once the dust settles and arrangements have been accommodated as best they could be on both sides, the children should always have access to the non-custodial parent and the custodial parent should allow for that, without bitterness, whenever possible. It is not fair otherwise, for the emotional health of the children if you do not.
However, it can be hard to do so as time goes on, especially if the ex is no longer providing the child support that they agreed to proffer every month. But, someone has to be the adult and we will show you how you can pursue child support in hopes of keeping it as civilized as possible for the children’s sake.
During the Initial Divorce Settlement
During your divorce, your attorney or your family court appointed child support attorney, should have had writs filed seeking child support from your ex, if they were not going to provide it otherwise. Even if there was a prior agreement between the two of you, it is still wise to get an order issued that sets down the exact amount to be paid every month, as well as rights of either spouse to file for changes to it. By having everything in writing, if your ex bails and stops paying the payments, you have the proof you will need to pursue a claim through child support enforcement agencies.
During the divorce, once the financial records were filed, the family court would have done the child support calculations, estimated against current and future income of the non-custodial parent, as well as the established income level of your own means and declared what the monthly child support payment should be. If your ex should default, you can then take this writ to your child support attorney, who will then file a case with the Department of Revenue, the agency responsible for handling FL child support collection actions.
Ways of Collecting What is Due
The main thing to keep in mind is that you and your attorney will be doing everything that you can to give the collection agencies all the information they need to get what you are owed. It is then up to them to pursue every legal means necessary to collect those funds, though it has proven to be difficult to effectively collect, especially if your ex is going out of their way to make it impossible to track them down. You might be surprised to learn just how creative an ex-spouse can be to avoid making their monthly payments. The gamut has ranged from actively working outside of the state, so that their income is literally non-existent, to working under assumed names or creating a record of erratic employment. All of these factors can make it hard for the Department of Revenue to get you what you need, at least at a state level.
The first level of collection is to garnish their paychecks, if they have an employer of record. This means that they have the right to withhold your ex’s pay until the back support is caught up, for however long it takes. Of course, the common retaliation is to quit that employment, because no job mean no paycheck. The next level is financial liens against property owned, garnishing bank accounts and tax refunds, whatever way they can get the cash out of them. After that, the ex is looking at jail time, suspension of their driver’s license and the forced pledging of a bond that guarantees that the arrearage will be paid.
Student loans fall into the category of unsecured debt – debt that is not tied to a piece of collateral such as a car or your home. When you default on an unsecured loan, the lender, and by extension, any third party debt collector trying to collect on that loan, cannot threaten to take your home or car, garnish your wages or freeze your bank account. In order to do any of that, they need to go to court and obtain a judgment against you.
One of the defenses that the consumer has in the case of unsecured debt is the statute of limitations. Once a debt has reached a certain age, the debt holder or collector can no longer go to court to seek a judgment against you. The number of years varies from state to state, but every state has a statute of limitations to prevent debts from coming back to haunt you years down the line.
One difference between most unsecured debts and student loans from the Department of Education is that there is no statute of limitations. No matter how long it has been since you took out the loan, it is still legally enforceable. The holder of the debt can go to court to seek a judgment against you for the loan.
A second difference between most unsecured debt and educational loans is that default student loans, unlike most other types of unsecured debt, are not discharged in a Chapter 7 bankruptcy. Except in the case of extreme financial hardship, which you must prove, you’ll still have to pay your student loans even if you file for bankruptcy.
Education Loan Debt Collection
The Department of Education also has a number of ways to collect on default educational loans that aren’t available to most bill collectors. They can, for example, “claw back” money by subtracting it from your tax refunds or from Social Security payments, as well as require employers to withhold wages from those who have defaulted on their student loans. The department sometimes sends loans to outside collection agencies. If your defaulted student loan is sent to a third-party debt collector, you’ll be responsible for paying the collection costs. If you’re taken to court over a default educational loan, you’ll be responsible for paying the court costs.
Can You Dispute Student Loan Obligations?
There are three legitimate reasons to dispute student loan obligations. The first is that you are not obliged to pay the loan. There are a number of reasons why you may not be obliged to pay the loan. Generally, you must prove that you don’t actually owe the loan, such as when your identity was stolen or you didn’t sign the promissory note for the loan, or if you’ve already paid the loan or settled it in another way. There are also certain conditions under which your student loan may be forgiven, such as if you are permanently and totally disabled. There are a number of other, usually rare, conditions under which your student loan may be discharged.
The other two reasons for disputing your student loan are to dispute the amount of the loan and to claim financial hardship. All of the situations where you may be able to dispute your student loan or attempt to have it discharged are complex and require a lot of legal work. A good collection attorney who works with student loan debt can work with you and help you to make the best case possible.
Third Party Debt Collection
The Department of Education releases a number of default loans to third party debt collectors each year. These agencies get to keep 25 cents of every dollar they collect, and are highly incentivized to do whatever they can to collect as much as possible. That being the case, it’s not unusual for these debt collection agencies to step over the line into illegal debt collection practices. Despite the differences between educational loan debt and other consumer debt, those agencies that collect on education loans must abide by the Fair Debt Collection Practices Act just as any other debt collector must. If a debt collector threatens, misleads, harasses or deliberately embarrasses you, they are guilty of violating the FDCPA and may face penalties for their actions. Don’t be a victim of unfair and illegal debt collection practices. A fair debt attorney can help you understand the law and what you can do to obtain justice.
