Debt collection jobs continue to rise in popularity and in fact, the Bureau of Labor Statistics reports the industry will grow by 19 percent within the decade. The job can get difficult, as it can be challenging to contact people, discuss their debt and come up with viable debt repayment plans. Whether you aim to study as a debt collector or work in the field of debt collection already, there are helpful tips to keep in mind which can guide you to becoming most effective and successful at your job.
Learn the laws. To ensure you are aware of all your options for getting an unwilling debtor and to keep yourself from getting into any legal trouble, you should understand all of the laws and learn what you can and cannot do in order to collect debt. A successful debt collector knows the laws surrounding debt collection and how and when to use them.
Call at the right time. People most often work daytime hours, typically between the hours of 8 a.m. and 5 p.m. Although this is obviously not the case with everyone, you have the best chances of reaching a debtor by calling after 6 p.m. on weekdays and between 10 a.m. and 5 p.m. on the weekend.
Act sternly but not mean. Although it can become difficult when debtors turn angry and act agitated with you, keeping your attitude in check can mean the difference between getting a debtor to pay and having him shut down. People in debt are stressed out enough and living from one paycheck to the next with little spare money in between. You must keep a stern tone when speaking but remain friendly and understanding at the same time, to convince debtors to pay but also let them know you understand and are willing to negotiate.
Talk and negotiate a deal. For debtors who are unwilling or financially unable to pay back their debt, you may be able to collect at least a portion by offering to come up with a manageable debt repayment plan. For instance, you can make a deal to accept half the amount of money owed as long as the money is paid immediately in a lump sum.
Persist and have patience. Although it can be difficult at times, in order to be a great debt collector you must always be persistent and never give up just because a debtor hangs up on you, speaks rudely or refuses to pay outright. In most cases, the older a debt becomes, the harder it is to collect, so you should keep on your debtors and try different tips and techniques to recover monies owed.
Every business has its share of slow-paying and non-paying customers. Bad debt is a problem for businesses of all sizes. If you are considering dealing with non-paying customers yourself, think again. It may make sense to hire a collection agency instead. They are skilled in debt collection strategies and legal protocol, so that you can leave the task to them with confidence.
Debt collection agencies decide upon the means of collecting debt according to the type of debtor. Some debtors do not need much persuasion while others do. For many debtors, just getting a letter from a debt collection agency is sufficient to make them pay the bills. However, some difficult debtors will do anything to avoid paying the debt.
Handling difficult debtors requires patience, skill and perseverance. Difficult debtors can be easily identified by their attitude. They can claim that they do not owe the creditor any money and try to wheedle themselves out of the situation. If they acknowledge the debt, they will make every excuse under the sky to convince you of their financial difficulties and inability to pay up.
Here are some tips on handling difficult debtors:
Contact the right person: Ensure that you are talking to the right person in the debtor’s company. Do not let the debtor refer you to other people to engage you in a fruitless merry-go-round.
Be firm: Make it clear that you expect payment for the products or service that the debtor has purchased from you. You have fulfilled your side of the contract by providing the services and goods and you have every right to expect payment for it.
Be professional: Though communicating with difficult debtors can be aggravating, as a professional you need to be keep your cool at all times. You must be patient and firm. Adopting a professional and impersonal attitude helps. Do not shout, even raise your voice, abuse or threaten the debtor, on any account.
Be focussed: The debtor may try to divert you from the problem on hand by discussing personal stories and making innumerable excuses. You must keep a tight rein on the conversation at all times, and bring it back to the purpose of the meeting – to collect payment or get a commitment for the payment.
Ask questions: Interrogate the debtor on the excuses made for not paying the debt. Asking lots of questions forces the debtor to come up with believable answers and in the barrage of stories, the truth can just slip out. The debtor usually hopes that the lies will be accepted without question. Persistent questioning makes debtors uncomfortable, as they have to keep coming up with more lies to support their excuses. Avoiding a repeat performance of the interrogation prompts debtors into settling the payment.
Report debtor to credit rating agencies: Sometimes, none of the above measures will show results. This happens when the debtor is exceptionally stubborn. Inform debtors that you are being forced to report them to a major credit rating agency. Reporting debtors to credit rating agencies will affect their chances of getting credit for up to 7 years. Sometimes, the threat works and the debtor may pay up. Otherwise, you must follow the warning with action and report the debtor to the credit bureau.
Litigation: Litigation is the last resort. Warn the debtors of your intention of filing a lawsuit against them. If they do not heed the warning and pay up, make sure you follow through and file a lawsuit. This will make the debtor take collection attempts seriously and it will affirm your credibility.
Debt collection from difficult debtors is an unpleasant and arduous task. However, it needs to be done. Patience, focus, persistence and professionalism are required to handle these debtors. Warnings must always be followed by action to ensure the debtor takes collection proceedings seriously and pays the debt.
If you are a business owner, you will likely encounter overdue debt on a very routine basis. A huge number of customers – both individuals and other businesses – will inevitably forget, not bother, or refuse to pay their bills.
It’s easy enough to deal with the forgetful procrastinators with a couple of firmly worded overdue notices, but for those who still don’t pay, there is a time to turn things over the a debt collection agency.
When it becomes clear that a customer doesn’t intend to pay you of their own free will, turning things over to another party probably isn’t a bad idea. For example, customers that flatly deny owing you money, despite your records, are very difficult to deal with without help.
A customer making repeated, groundless claims and complaints for the sole reason of getting out of a payment, is another tell-tale sign that your business may have a problem on its hands. In cases like this, it is a good idea to send a final warning notice, attempting to create a fair repayment plan. If no action is taken by the other party, it is then time to seek help from professional debt collectors.
Another obvious sign of trouble is when a delinquent debtor changes their address or telephone number without notifying you or providing forwarding information. In cases like this, you should immediately get assistance from an agency that is willing to track down the customer and act upon the debt.
In American’s life, debt collection can be stressful and often impossible to fix. Here, are steps to get rid of debts.
Firstly, make a close analysis of your credit reports. Go through all bills and make a report of your situation. The second step will be to calculate your expenditure. Cut out those expenditures that are unnecessary and get rid of credit cards. Then make a budget of all bills and adhere to it.
You should set up your bills priority wise. Those that need immediate payment must be paid off soon, others may be paid in a while. Consider the interest you are paying on credit cards and loans. Those that demand more interest needs to be get rid sooner.
There is a fixed time before which creditors cannot bother you for repayment. Know the time and try to pay off the interest in that time. In case the date has expired, the debt collection of a debt statute limitation will determine how the collection of a debt will occur.
Longevity of the statute of limitations in the collection of a debt
Statute of limitations for the last day of account activity is different for different states, but it gives a generous time of minimum three years in all states. In California, the statute of demands for oral contracts is two years, and for credit card accounts, it is four years. The last date of activity of your account may be varying, from the past due date of the bill and needs, to be clarified with the credit report of account. As soon as any transaction happens the collection, debt stature of limitations will restart.
Most companies have problems related to debt collection and hire staff to handle this. Getting an attorney may be costly but it is highly effective. Legal notice gets faster attention than verbal notice. You can make the services of the attorney affordable; by the way, you approach one.
Hiring distinctive debt collection companies are also not extremely cheap. Therefore, if the legal services are availed in package deals, it is the best proposition. This package deal serves other purposes also, as while, in contract review, you can get assistance. The small business owners can get rid of hassles and headaches in many ways by the legal assistance backup.
Another help that one gets for legal assistance is that in case there is a dispute in the collection of a debt, the attorney can help. This is the best cushioning from fraud lawsuits. The attorney has kept it all ready to fight back.
The Accounts Retrievable System, Inc is a national debt collection agency serving the collection needs of respected clients. Its client base includes wholesalers, retailers, credit unions, manufacturers, law firms, banks, universities, and mail order companies. The company receives claims from creditors all over the United States against debtors throughout the country. Our skilled professionals are experienced in all aspects of debt recovery.
Remedies – A Judgment entered in your favor entitles you to certain remedies under the law, enabling us to collect the balance due. These remedies may include:
– Garnishment of debtor’s bank and brokerage accounts.
– Garnishment of wages.
– Levy and execution of personal property including automobiles, boats, equipment, etc.
– Levy and execution on real estate and business assets, in exceptional cases.
Fees – Our goal is to provide fast and efficient debt collection services at competitive rates. We work on a contingency fee basis, which is standard in the collection industry. That means that if we collect, we earn a fee from the money collected. If we do not collect, there is no charge to you for our efforts.
Since 1986, ARS has delivered professional, highly effective results for clients on a worldwide basis. ARS is recognized as a leader in Judgment Collections, Commercial Collections, Consumer Recovery, and is a specialist in debt collection of Child Support and Spousal Maintenance. Our partnership approach, rapid collection and ability to preserve relationships form the cornerstone of our commitment to excellence.
With three decades of experience both domestically and internationally, ARS serves a broad spectrum of industries.
ARS clients benefit from an array of collection solutions designed to increase cash flow, reduce expenses, improve operational efficiency and maintain positive customer relations. We are proud of our ability to deliver professional, effective and timely results worldwide.
ARS strives to remain a leader in the industry. ARS is comprised of a strong, cohesive and committed team. Our consistent track record for successful outcomes stems from a forward-thinking corporate mix where personal and professional aspirations thrive and progressive ideas flourish. Our team is kept current on all laws and statutes, FDCPA and FCRA compliance through ongoing education, and by attending seminars and meetings throughout our affiliations with the Commercial Law League of America (CLLA), the American Collectors Association (ACA), and DBA International (DBA).
Our company’s commitment is to constantly reinvest in our employees, new technology, recovery resources, professional staff, legal solutions, and innovative systems and procedures.
ARS’s legal solution is centered around our network of experienced collection attorneys. Our Forwarding Department coordinates litigation services for all 50 states and beyond. By having successfully litigated tens of thousands of cases for creditors, our legal network has the litigation experience to help our clients achieve maximum results and minimize any potential exposures.
ARS utilizes a wide range of technological tools and resources to help each client achieve the best possible results. Our staff has access to the latest software programs with enhanced security and a state-of-the-art secured network with a full disaster recovery program.
Our focus is on the specific needs of each client’s portfolio, whether it is for one claim or for thousands and is built on systems and personnel already developed, tested, and proven on a day to day basis. ARS will never close an account until every debt collection option has been exhausted.
Our services are based on a contingency fee arrangement; therefore if our attempts at debt collection are not successful, you will not be charged!
No Debt Collection…No Fee
COMMERCIAL DEBT COLLECTION DIVISION
RATES: Contingent Upon Debt Collection
Before Litigation:
29% of collections
After Litigation:
When suit is recommended, client’s authorization will be required. Should suit be authorized, creditor will be responsible for advanced court costs. Court Costs vary from state to state and these rates will be quoted in our lawsuit requirement letter prior to authorization.
39% of collections
Large claims (over $500,000) – rates negotiable on an individual basis
CONSUMER (RETAIL) DEBT COLLECTION DIVISION
RATES: Contingent Upon Collection
Before Litigation:
34% of collections
After Litigation:
When suit is recommended, client’s authorization will be required. Should suit be authorized, creditor will be responsible for advanced court costs. Court Costs vary from state to state and these rates will be quoted in our lawsuit requirement letter prior to authorization.
44% of collections
JUDGMENT COLLECTION DIVISION
RATES: Contingent Upon Collection
33% of collections, net, after execution costs. Such costs include, and may not be limited to, Sheriff Fees, Marshal Fees, Attorney Fees, and Court Costs. You should note that if the Judgment Debtor moves to another state, and you desire to domesticate your Judgment in the “new” state, you must advance the local Court Costs to domesticate your Judgment.
CHILD SUPPORT / SPOUSAL MAINTENANCE COLLECTION DIVISION
RATES: Contingent Upon Collection
33% of collections, net, after execution costs. Such costs include, and may not be limited to, Sheriff Fees, Marshal Fees, Attorney Fees, and Court Costs.
INTERNATIONAL CLAIMS
39% of collections
Foreign attorneys may require retainers or handling fees as is customary in their country and such rates will be quoted in our lawsuit requirement letter prior to authorization.
OTHER TERMS AND CONDITIONS
A. Return of Merchandise- When the client elects to accept a return of merchandise, one-half of the applicable rate will be charged on the value of the returned merchandise.
B. We must be advised of direct payment immediately by fax or telephone. It is important to let us know as soon as possible that a payment has been made directly to you to avoid the potential of violating Federal and/or State collection Laws. (i.e. FDCPA)
C. After an account has been placed for collection, any payments made direct to our clients are subject to full fees as detailed above.
D. Court Costs must be advanced if the Judgment Debtor moves to another state and you desire to domesticate your Judgment in the “new” state.
Bad debts are a growing area of concern for businesses the world over, which is the reason why most of them take the help of debt collection agencies. Debt collection agencies not only work more efficiently but more professionally to get back your debts, while you can focus on your business. Read on to know more.
Business operations are getting complicated with each passing day and hence, there is need for greater professionalism and specialization in dealing efficiently with every aspect of a business. In such a scenario, recurring problems like bad debts can pose a big problem for a business. It is a problem that all businesses have to deal with. However, if the magnitude of the accumulated bad debts increases, it can mean huge losses to the business. Trying to deal with it requires not just time and effort but also specialization and experience. Neither do the businesses have that much time nor the specialization to deal with bad debts. Moreover, it is not uncommon to have certain debtors who are not reachable. It doesn’t make any sense to try to locate these debtors which will only result in wasting your time, hence, the need for appointing a professional collections agency who can take on the responsibility for the hassling task from you, assuring the best possible results, so that you can shift your attention from the delayed payments and focus on the core job, that is your business.
What makes the debt collection agencies so efficient in collecting your debts? Since collection of debts is the main job of the debt collection agency they will spend far greater time than you can on the delayed accounts. They have got the specialization and the experience which makes all the difference between their approaches in dealing with the problem. They work step by step in a particular fashion, making their best efforts to get the payments as smoothly as possible while being highly professional in their approach in the entire process. This kind of professionalism is extremely important in debt collection, because while you want for your payments, you often do not want to spoil your business relations with the debtors which are necessary in the domain of business. It is yet another important aspect of taking professional help rather than trying to get back your debts on your own.
A debt collection agency typically, first tries to contact the debtor through a series of notification letters called demand letters giving ample time to the debtor to respond and also offering the option to enter into negotiations. If the debtor fails to respond to the letters in the given time period, the debtor is then personally contacted. Direct contact with the debtor often results in a positive reaction as firstly it is not a very good experience to be contacted by a debt collection agency and the debtor understands that the matter is now serious. Secondly, the debtor can at times be given some options to make the payment by negotiations. If there is still no response, then legal action can be taken against the debtor as a final resort, with your consent. Legal action is only undertaken when all other efforts fail and is not used under general circumstances.
If you’re considering leaving a credit card or hospital bill unpaid, be aware of the fact that doing so for long enough will almost certainly result in your creditor remanding the full balance you owe to a collection agency for debt recovery. A debt collection agency is any organization whose sole purpose is to collect overdue debts.
Debt Collection agencies usually purchase old debts directly from businesses that wish to clear their accounting ledgers. Very few businesses, if any, will sell their old debts to collection agencies before the debt goes six months without any activity. After the six month mark, most companies consider the debtor unlikely to ever pay and prefer to take a loss on the account rather than continue to dedicate corporate resources to collection activity. Occasionally, third-party collection organizations also work on commission.
When collection consumer debts, all debt recovery organizations must follow the Fair Debt Collection Practices Act (FDCPA) to ensure that each consumer’s rights are respected throughout the collection process. The FDCPA dictates that collection agents cannot harass debtors, misrepresent themselves or the company they work for or disclose private consumer information with anyone other than the consumer. Failing to do so could result in a lawsuit.
Debt Collection agencies frequently report each of their accounts to the credit bureaus. When a company reports an account to the credit bureaus, a trade line appears on the debtor’s credit report. In the case of adverse accounts, such as collection accounts, the trade line is derogatory and will always have a damaging effect on the debtor’s credit rating.
It could be argued that an internal credit control department provides the same service as a debt collection agency. However, a debt collection agency can often provide better results whilst being more cost effective. The effect of a third party debt recovery agency becoming involved should also not be underestimated. Often, a simple demand for payment from a third party agency can be the prompt a debtor requires to settle an unpaid account.
A debt collection agency can also provide additional services to the core business of debt recovery. For instance, a collection agency may also provide legal services, enquiry agents, process serving, company searches, credit reports & company formations in addition to debt collection services. An agency providing all of these services can therefore be a “one stop shop” for all your credit control requirements.
A debt collection agency may also have its own in house legal department employing solicitors & legal clerks. Such firms provide a real alternative to the traditional option of employing a solicitor & often at a fraction of the cost. A debt recovery agency with an in house legal department often provides a much more professional service than a firm of solicitors, who may not be specialists in the debt recovery arena.
Debt collection agents often have a less than desirable image. However, in recent years much has been done to regulate the industry to ensure that an efficient & ethical service is provided at a reasonable price. Ensure that any debt recovery agency you consider engaging is regulated by the relevant governing bodies & holds the appropriate licenses & accreditations.
When considering engaging a third party agency also make sure that you understand the fees & pricing structure. Avoid any collection agency that requires payment upfront or requires you to purchase credits or join any form of membership scheme. A reputable debt collection agency will have a clear & concise fee structure which will usually be a set commission on any monies recovered.
Choosing the right debt collection agency will assist to reduce your credit control costs, will reduce your debtor days & therefore make your business more profitable whilst at the same time leaving you with more time to run your business.
