Accounts Retrievable Systems - Employing A Debt Collection Agency
Debt collections is a task nobody enjoys doing. Business owners naturally prefer that their customers pay on time and that friendly relations are maintained all around. But truth is, there are customers who are hard to collect from. There are cases when the debtor can not be reached by mail, phone and email. There are even those who simply vanish, leaving you in despair over the loss of funds that would have made a big difference in your business operations. But bleak though the situation is, everything is not yet lost. You can still employ a collection agency.
Employing debt collection agencies should only be resorted to after you have tried all other conceivable means of debt collection. A debt collection agency is an entity that provides debt collection services. By employing a debt collection agency, you are in effect, outsourcing your debt collection functions.
By employing a debt collections agency, you do not generate more opportunity costs. Instead of spending frustrating hours on the telephone, writing mails and emails to reach your phantom debtor, you can do other more productive things with your time.
And debt collection agencies are effective in inducing people to pay their debts. Most people are wary of collection agencies. The moment their debts are with collection agencies, bad things happen to their credit records. Collection agencies are also persistent in their efforts to collect the money, thus a constant stream of phone calls is expected. Employing a collection agency proclaims to your customers that you are determined to collect.
Debt collection agencies can also help you with filing a case in court if such becomes necessary. Collection agencies are proficient in debt litigation and will be valuable if you decide to go this route. Of course, you have to make sure that the debt owed is worth the cost of going to court.
Finally, the best thing about collection agencies is the fact that you don’t pay them anything while they are trying to collect off your customer. They work on commission basis, payable only after they have managed to collect from the debtor. Thus, if the collection agency is not able to collect, you saved time and money that you would have spent had you been doing the collecting yourself. If the debt collection agency succeeds, then you get your money back minus the paid commission that’s money well spent.
Accounts Retrievable Systems - Hiring A Debt Collection Agency
Generally speaking, the ideal time to hire a collection agency is when you feel that your customer has no intention of paying you. The general rule of thumb when it comes to collecting on an unpaid bill is that sooner is much better than later. Statistically speaking, after 3 months you can expect to collect $0.73 on every dollar. However, after 6 months the amount you’re likely to collect drops to only 50% and then to only 25% after 1 year.
If you’re serious about getting your payment, you’ll want to hire a collection agency once the account is 90 days overdue. Of course, you can use discretion to decide which accounts will be sent to a collection agency and which will not. If a long-time customer is experiencing some financial trouble and has been in contact with you, you may wait longer than for a new customer who has been avoiding your bills and phone calls.
Warning signs that customers are not planning on paying:
Aside from missing payments, there are a few specific signals that customer send to cue you in to the fact that they probably don’t intend to pay.
– Relocating without submitting a change of address with you or the postal service
– Customer doesn’t respond to your phone calls, bills or final notice letters
– Customer denies that he or she owes you money
– Customer disputes the quality of the product or service and refuses to pay
If your debtors show any of these signs, there is no need to wait past 30 days to hire a collection agency.
When not to hire a collection agency:
If the debtor is a company that has gone out of business, find out what type of company it was before hiring a collection agency. If the company was a corporation or an LLC, your chances of collecting the debt are low unless you have a personal guarantee. However, if the company was a sole proprietorship, a collection agency can collect the debt from the owners who are personally liable for any debt.
What to do if your debtors won’t pay:
The reason it’s so critical to move quickly when it comes to debt collection is that it is very difficult to recoup a loss from a non-paying customer. You can write off the cost of any goods sold that weren’t paid for as a bad debt tax deductible item. However, you cannot write off the profit you should have earned from the sale of the goods and you cannot write off money owed for services rendered.
Since the amount of time that elapses has a direct impact on the amount you’ll recover, your choice of when to hire a collection agency depends on the amount of profit your business needs to thrive. Whether $500 or $50,000, having a solid plan of action to take once an account becomes delinquent will save your company’s hard earned money.
The type of child support enforcement used depends on how long the parent has not paid, the amount due, and the jurisdiction. Some common enforcement methods are wage garnishment, removal of licenses, and fines. In some cases, a person who is not in compliance with child support laws may be jailed, have his or her tax refunds held, or have liens placed on a car or house. Child support enforcement typically becomes stricter the more the parent owes or if the parent attempts to cross into another country while owing child support; for example, passport denial and federal prosecution are legal methods of enforcement used in some countries. Another method of child support enforcement, which is typically done by individuals rather than state officials, is public announcement and embarrassment on the Internet or television news shows.
One typical child support enforcement method involves taking money directly from a parent’s income source so that the parent has no way to withhold payment. The usual method of doing this involves the legal jurisdiction interacting with the parent’s employer so that the employer sends a portion of the parent’s income to the jurisdiction. In the United States, for example, up to around 60 percent of total wages earned can be garnished for the purposes of child support.
Another way that some jurisdictions may enforce child support payments involves the garnishment of tax return funds. In some countries, if someone is behind on his child support payments, tax return funds can be seized to fulfill this obligation. Implementing the seizure of tax return funds usually involves working with the local child support enforcement agency.
Depending on the jurisdiction, the parent can be held in contempt of court for not paying child support. Besides court costs, he or she will likely be ordered to pay the balance in addition to being fined. The fine can be quite hefty, especially if the parent has repeatedly failed to make payments or obviously attempted to evade payment by moving into another region or country.
If the parent fails to pay child support for a certain period of time, such as one year, or the payment owed reaches a certain amount, she may find herself without a driver’s license. This law can usually affect other licenses, from hunting or fishing to medical licenses. The license is usually returned when the parent proves he is up to date on child support payments.
Alimony is a legal financial arrangement between separated or divorced couples, whereby one partner provides regular payments to the other. It is only available to couples that have been legally married. Unmarried couples have palimony for relief.
Traditionally, married couples consisted of a working partner and a domestic partner. The working partner provided financially for the couple, while the domestic partner contributed in other ways, most notably by physically and emotionally supporting the working partner, keeping the home up, and in many cases, caring for children. When a marriage dissolved, the domestic partner was awarded alimony as a means to honor the promise of “lifelong” financial support in recognition of contributions made to the relationship.
Many things have changed since laws on this subject were written. It is now commonplace for both partners to have careers or a means of independent support. And while there is still significant statistical disparity between salaries paid to men versus women, overall women are more independent than they were in decades past.
Some might argue that the spirit behind alimony is too easily abused today. For example, marrying a wealthy partner can mean being set for life after a divorce. In cases like this, it may be argued, the judgments become a means to an end rather than a remedy.
In the US, although state laws differ, there are commonly three different types of alimony: lump sum, temporary, and permanent.
Lump sum alimony describes an arrangement whereby the court allows payments to be calculated and paid at once. Though this might sound appealing to both sides, due consideration should be given to related tax issues. The arrangement might not be favorable to both parties.
Temporary alimony, sometimes referred to as rehabilitative alimony, describes an arrangement whereby the receiving partner is reasonably expected to regain financial independence and only requires support for a period of time. In this case, the money might go towards furthering education or training skills.
Permanent alimony refers to payments made regularly for an indefinite period, or without a fixed end date. At some point, however, the payee normally petitions the court to change or even end this arrangement.
The type and amount of alimony awarded is based on many considerations and circumstances. Some considerations are: length of the marriage, ability to provide for oneself, disparity between incomes, contributions and sacrifices made for the sake of the marriage, and so on.
Death of either partner will terminate alimony. Other circumstances can also end or modify the payments. For the paying spouse, these include loss of job or a significant decrease in income. For the spouse receiving the money, remarriage terminates alimony, while a financial windfall or substantial pay hike can reduce or end it. Cohabitation of the receiving spouse with a new partner may or may not affect the payments, depending on laws and the specific circumstances of the case.
Alimony is a complicated area of law with large stakes. This article provides general information only, and is not legal advice. To inform and protect yourself, contact experienced legal counsel in your area.
There are a number of tactics that may be available to you when you are owed back child support. If the order is being enforced by a child support agency, you should contact them and ask for advice. You may be able to secure a garnishment on the delinquent parent’s income. Furthermore, if the individual is in another state, the threat of filing federal criminal charges may motivate him to pay.
Many people believe that child support enforcement agencies are flawless. They believe that if something more could be done to collect back child support, those tactics would already be underway. Do not make this mistake, because these agencies are staffed by human beings who are often managing large caseloads. Be proactive and call the agency to make sure that professionals there are aware that there is back child support due. Ask if there is anything that can be done to motivate the delinquent parent to pay.
If the person who owes you back child support has a job, wage garnishment may be the best option to get your money. Wage garnishment is a process that allows a certain amount of money to be deducted from a person’s earnings before he receives a paycheck. Even if he does not have a job or he is self-employed, you may be able to get the amount in arrears by garnishing other sources, such as bank accounts, tax returns, or unemployment payments.
In some jurisdictions, it is permissible to report back child support to credit reporting agencies. Before you do this, it may be best to notify the delinquent parent of your plan. Since most people are well aware of the problems that bad credit can cause, the individual may be motivated to pay. If you report the overdue child support to the credit reporting agency without telling him, he may conclude that the damage is already done and he may not settle the debt.
Back child support is indeed debt, like an overdue credit card account or mortgage. Just as you may be able to garnish income, you may also be able to place a lien on personal property like other creditors do. A lien allows you to place a legal stake in someone’s property, such as real estate or a vehicle. Then it cannot be sold, borrowed against, or transferred without you receiving the back child support. If the title of the property is exchanged while it is subject to a lien, the debt passes along to the new title holder.
If you are in the US and the individual who owes you back child support lives in another state or left the state to avoid paying you, you may be able to motivate him by threatening prosecution. These circumstances can constitute federal violations under the Deadbeat Parents Punishment Act. There are certain requirements that must be met, but when a person is found guilty, he may be ordered to pay a fine and may be incarcerated.
Accounts Retrievable Systems - Collection Of Past Due Child Support
In most jurisdictions, a non-custodial parent is obligated to pay child support to the custodial parent when the parents no longer live together. Unfortunately, the parent obligated to pay support does not always pay according the court’s order. There are, however, things that the parent who is owed delinquent child support can do to try and collect the support owed. Contacting the local child support enforcement agency is usually a viable option for collecting delinquent child support. Requesting a wage garnishment or tax return lien from the original court are also good tactics for collecting delinquent child support owed by a non-custodial parent.
Jurisdictions will vary with regard to what services they offer for child support enforcement and collection. Within the United States, most states have child support enforcement offices that are usually affiliated with the local prosecutor’s office. Before contacting a child support enforcement agency, it is a good idea to gather as much information as possible about the person who owes the child support. For example, a current address, employment information, and even what type of vehicle he or she drives may be helpful, if available. Local child support enforcement agencies will generally help in situations where the amount of delinquent child support is over a certain dollar amount threshold.
If a local enforcement agency is unable to help, filing a motion for contempt of court with the original court may be another option. A child support order is an official order of the court, and failure to abide by the order can be considered contempt of court. Most courts will accept hand-written requests in child support cases. The motion should include specifics, such as the amount originally ordered, the amount paid to date, and a total amount of the arrears owed by the defendant.
Once before the court, a parent who is owed delinquent child support may ask the court to order a wage garnishment or tax return lien. A wage garnishment will order the defendant’s employer to hold back a certain amount, or percentage, of his or her paycheck each pay period to be forwarded to the court. The court will then forward the funds to the parent who is owed the support. The court may also order that any future tax refund checks be paid directly to the parent owed the support.
Some jurisdictions will also order the suspension of a parent’s driving privileges when he or she is behind on child support. Although this does not directly secure payment, many defendant’s will quickly catch up the payments in order to get their privileges reinstated. Likewise, incarceration is often an option with a cash bond set for release of the defendant. Money from the bond is then sent to the parent who is owed the delinquent child support.
Debt Collection Agency - Collecting Bad Judgements
Judgment debts are debts that have been reviewed by a judge in a court of law, and found to be valid. The judge rules in favor of the creditor or lender, and orders the debtor to pay the amount specified by the court to the winner of the lawsuit. While a bad debt judgment of this type does further limit the ways by which a debtor can settle his or her debt, there are still a few strategies to deal with judgment debt without having to appear before the judge for a second time.
Often, when a judgment debt is rendered, the judge hearing the case will also specify the different strategies that the creditor can use to collect on the debt. The action often grants the right of the creditor to initiate garnishment of the wages of the debtor, with a percentage of the debtor’s net pay withheld by the employer and forwarded either to the court or directly to the creditor. The maximum percentage of wages that can be withheld for this purpose varies from one jurisdiction to another, with most countries allowing a maximum of twenty-five percent of the net paycheck going to satisfy the garnishment action until the entire debt is retired.
A second possible way to collect on a judgment debt involves the imposition of a lien. In this scenario, the court allows the creditor to obtain a lien against some form of real property that is owned by the debtor, such as a vehicle or a house. Depending on the circumstances surrounding the debt, the judge may require that the property be sold, and the judgment debt retired using the proceeds from the sale.
The imposition of a levy is also a possible means of settling a judgment debt. Here, the judgment creditor has the right to seize cash from different deposit accounts held by the debtor as a means of settling the outstanding debt. The action can be conducted without any prior notice to the debtor, as long as the proper legal documents are presented to the bank or other financial institution where the accounts are established.
It is important to note that once a judgment debt is granted, that does not mean that collection processes will begin immediately. A judgment of this type normally allows the creditor a time frame in which to begin the collection process. If necessary, the creditor can apply for an extension to this time frame. For this reason, a debtor should take action immediately after the judgment is granted, and attempt to work out terms of repayment with the creditor. This move can prevent the need for more legal action, and also allow the debtor to begin rebuilding his or her damaged credit.
Accounts Retrievable Systems - Tips For Debt Collection
People fail to repay their debts in a timely fashion for a number of reasons. For those who make loans or extend credit, being owed can be stressful and it can be problematic. The difficulty associated with bad debt collection can aggravate the matter, but there are some things that creditors can do to increase their chances of payment. These include making personal contact, being professional, and employing a debt collection attorney.
It is always best to put forth all the necessary effort to speak with the debtor. Spouses or household members may listen and they may promise to deliver the message, but they generally cannot or will not make payment commitments. If the debtor is unavailable, it is best to ask for the name of the person who is reached. Then, ask for the best time to reach the debtor. Finally, use the person’s name to confirm the information by saying something such as, “Okay, Martha, since you said that George will be home on Wednesday after five, I will call him then.”
Personal contact can be much more effective for bad debt collection than impersonal measures such as letters or messages. One reason for this is because talking to people provides assurance that the debtor is aware of the concern and the attempts to collect. Messages may be erased or left unchecked for extended periods of time. Letters may get lost or be discarded without being read.
Another reason that personal contact can be effective for bad debt collection is that many people, even those with bad debt, are honest. If they say they will do something, it weighs on their conscience if they do not do it. This means that getting a commitment for payment or partial payment can result in a person feeling obligated to act on those words.
Everyone who has bad debt is not honest, however. Some people may say anything to end the conversation. In some instances, although they owe, people will become defensive and rude. It is best to always maintain a professional attitude. Otherwise, the debtor may become irritated and decide not to pay as a form of retaliation for the lack of courtesy.
Although professionalism should be exercised at all times, it is important to communicate the need for payment. Doing this should involve the debtor being told how non-payment will affect him. Individuals may not feel sympathy for creditors or they may believe that a company has so much money that outstanding balances have no effects. It can be much more motivating, however, if debtors are informed of the personal consequences they will suffer. Collectors should, however, be careful to prevent delivering this information in a way that makes it seem as though they are making threats.
In some instances, creditors cannot successfully handle bad debt collection on their own. When substantial efforts have been made and adequate opportunity to pay has been given, it may be necessary to hire a debt collection attorney. If the amount outstanding is not worth getting an attorney, it may still be effective to tell the debtor that this will be your next step.
Accounts Retrievable Systems - We Collect Judgements
Judgment recovery is the process of identifying and collecting money or property, or attaching the assets of a debtor after a court has entered an order in favor of a creditor. It covers all activities that the creditor can legally pursue between the time the judgment is entered by the court and when the debt is actually received in hand. A creditor can pursue recovery of the debt himself, or can sell or assign the judgment to a third party that is in the business of judgment recovery or collections.
Courts in most jurisdictions enable a creditor to sue a person who owes him money or property to determine the parameters of the debt and to receive an official declaration, or judgment, of the court. A judgment establishes a creditor’s legal right to redress. A court judgment, however, is just an official announcement that the debt is owed. Courts are not concerned with judgment recovery, and are not involved in the process of collecting money or property for the creditor. In fact, many court judgments are never recovered, because the creditor is solely responsible for the identification of assets and the recovery of the debt, and he may or may not be particularly adept at the process.
Most jurisdictions have laws in place that enable a holder of a judgment to pursue certain means to collect from a debtor. These options typically include garnishment of wages, seizure of bank accounts and other liquid assets, the application of liens to property, eviction, repossession, and forced sale of assets. The creditor is not usually required to pursue these contentious avenues under his sole authority, and can often register the judgment with an officer of the law who would then garnish, seize, evict, repossess, attach, or sell assets of the debtor and remit the money directly to the creditor.
Another popular option for judgment recovery is to sell or assign the judgment to a collection agency or debt recovery service. The recovery business will typically pay the creditor a fraction of what is owed under the judgment if it is sold outright. Although the creditor receives less than the full amount owed, he receives it immediately and can close the book on the matter.
A creditor must make sure that the judgment recovery service that he sells or assigns the debt to is reputable. Most jurisdictions have laws that protect the debtor from harassment and unscrupulous debt collection practices. If a creditor hires a recovery service to act as his agent, the creditor is responsible for all potential violations of the law that the business might commit. If he sells the debt outright, he has to ensure that the transfer of ownership of the debt is properly executed to relieve him of future responsibility.
The debt collection process typically begins with the original creditor. Customers who miss a payment may receive a letter in the mail or a phone call reminding them that payment is due. Missed payments resolved at this early stage typically have only minor consequences, such as a small fee or a minor incident on the debtor’s credit report. As time passes or the debtor misses more payments, however, the debt collection process becomes more serious; the creditor may begin calling more often or sending more urgent correspondence through the mail. About six months after the first missed payment, the creditor typically charges off the account.
A charged-off account means that the original creditor is giving up and selling the debt to an outside collection agency. This action typically has a severe impact on the debtor’s credit report. At this point, the collection agency is required by law to notify the debtor that it has taken over the account.
After receiving notification from the collection agency, the debtor typically has 30 days to challenge the authenticity of the debt. If the debtor argues that the debt is not valid, the collection agency is required to verify the account with the original creditor. The agency cannot take further action while the account is in dispute.
Once the 30 days have passed or the account has been validated with the original creditor, the agency begins the debt collection process. Agencies usually contact the debtor by mail or by phone and demand payment. Some collection agencies may be willing to work with the debtor by offering payment plans or settlement amounts, but they have the right to request as much as they want as long as it does not exceed the total amount owed. Collectors are not obligated to accept a settlement offer or payment plan from the debtor.
While debt collectors may employ many negotiation tactics in order to collect money, the Fair Debt Collection Practices Act prohibits certain behaviors. For example, collectors cannot call before 8 am or after 9 pm. They are not allowed to harass debtors, use obscene language, or threaten them with harm. Collectors may not make false claims about the debt or make threats involving legal action that they do not plan to actually take.
If the debtor fails to pay the amount owed or make settlement arrangements, the agency may either sell the account to another company or to a collection attorney. An attorney may take legal action against the debtor, including a judgment or lawsuit. Settlement at this point in the debt collection process often means an appearance in court and additional fines and fees. It also has a severely negative impact on the debtor’s credit report.
