Easy to Follow Strategies in Dealing with a Debt Collection Agency

For most people, a debt collection agency is equal to annoying phone calls and threatening letters. But these inconveniences can be avoided and you don’t have at war with that company. You can start by knowing your rights under federal laws that protect consumers and help them deal with any form of harassment from debt collection agencies. And the first thing that they can aid you on is to make the debt collectors prove the claims they are insisting from you because you may never know if you are just dealing with a con artist.

First off, unpaid outstanding balances are written off by creditors after about 6 months. But this doesn’t mean that you do not have to pay the debt anymore, because the creditors will contact debt collection agencies to assist them in recovering the owed amount. Though, the Fair Credit Reporting Act states that a debt can only appear on a credit report if it is incurred not beyond 7 ½ years from the time it is being claimed. So, if the debt is older than the said limit, then you are not obligated to pay it. You can just send a letter to that agency stating that they are violating FCRA by reporting you that debt and it should be removed immediately.

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But if the debt passes the limitation, then the next step to do is to ask for a proof of that debt. A validation of delinquent accounts is required by Fair Debt Collection Practices Act to be given by all debt collection agencies to their debtors. Include in your letter of request for validation that the agency should send receipt of it. After receiving those, send another letter demanding that the only communication they should have with you is through email or mail only. Offer a debt settlement agreement that you can afford and pay it upon the agencies acceptance of the deal. Then, ask for a receipt of your payment with a statement showing that you have zero balance from that company. Lastly, request that other unpaid accounts remaining must be written off and should not be sold to other collection agencies.

Now, from all of the knowledge shared, you may notice that validation is very important, you can have control of the communication method with the agency, and you can offer a lower payment for your debt. With this guide, you can now deal with the debt collectors in a less stressful yet still very cautious manner. But if you want to be more armed then reading more about federal laws concerned in this matter will definitely do greater difference.

Easy to Follow Strategies in Dealing with a Debt Collection Agency

For most people, a debt collection agency is equal to annoying phone calls and threatening letters. But these inconveniences can be avoided and you don’t have at war with that company. You can start by knowing your rights under federal laws that protect consumers and help them deal with any form of harassment from debt collection agencies. And the first thing that they can aid you on is to make the debt collectors prove the claims they are insisting from you because you may never know if you are just dealing with a con artist.

First off, unpaid outstanding balances are written off by creditors after about 6 months. But this doesn’t mean that you do not have to pay the debt anymore, because the creditors will contact debt collection agencies to assist them in recovering the owed amount. Though, the Fair Credit Reporting Act states that a debt can only appear on a credit report if it is incurred not beyond 7 ½ years from the time it is being claimed. So, if the debt is older than the said limit, then you are not obligated to pay it. You can just send a letter to that agency stating that they are violating FCRA by reporting you that debt and it should be removed immediately.

But if the debt passes the limitation, then the next step to do is to ask for a proof of that debt. A validation of delinquent accounts is required by Fair Debt Collection Practices Act to be given by all debt collection agencies to their debtors. Include in your letter of request for validation that the agency should send receipt of it. After receiving those, send another letter demanding that the only communication they should have with you is through email or mail only. Offer a debt settlement agreement that you can afford and pay it upon the agencies acceptance of the deal. Then, ask for a receipt of your payment with a statement showing that you have zero balance from that company. Lastly, request that other unpaid accounts remaining must be written off and should not be sold to other collection agencies.

Now, from all of the knowledge shared, you may notice that validation is very important, you can have control of the communication method with the agency, and you can offer a lower payment for your debt. With this guide, you can now deal with the debt collectors in a less stressful yet still very cautious manner. But if you want to be more armed then reading more about federal laws concerned in this matter will definitely do greater difference.

You Don’t Have to Waste More Money: A Guide on How to Choose a Debt Collection Service

Typically, when someone puts up a business, that person is more concerned about what product or type of service to offer and the marketing strategies appropriate for it. It will be the predicted profits which will usually occupy one’s mind. Thus, most businessmen forget that some customers will not pay their bills and that one day they will need to hire a debt collection agency.

Now, since you already lost some money, surely you don’t want to lose more by hiring the wrong agency. Hence, the first thing you should consider in finding the best one suited for your company is to have a list of those that handle companies which are in the same line of business that you have. Then, check their references and reputation in debt collection. Narrow it down to those who have Errors and Omissions insurance. This will protect your company from frivolous lawsuits that may be filed by angry customers. Aside from that, you must remember that some debtors will have no forwarding address and may even disconnect their phones. With that happening, they may be hard to find already, so it is imperative that you should select an agency that is good with skip tracing. Thus, reliability and efficiency are qualities you should find.

Moreover, it is equally important that the debt collection agency will match well with your debtors, so you should also know the general type of debtors you have. If most of them are individuals, then search for an agency that is expert in handling that individual delinquent account. If that’s not the case, then find one that has commercial experience. Also, if you have delinquent accounts that are out of state, then you may want to consider one that can handle that situation. Further, see to it that the agency does not have a reputation for harassing debtors. You should also investigate if their methods for communication really get response from debtors. Lastly, consider if their rate is fair enough and your budget can accommodate it.

So, it is vital for you to note that you should not only select an agency that is reputable, but one that can give the service your company needs. It may be a tedious task to do check all of those recommended information but it will surely pay off well in the end, especially if you will read more about federal laws that governs this kind of dispute.

Are you Recovering Incurred Debts or Losing More Money? Debt Recovery Solutions and How to evaluate them

Knowing that your company lost a significant amount of money from individual delinquent accounts or unpaid percentages of your business to business accounts are already hard for you to take. How much more if you don’t get responses from these debtors? So, before you spend more rather than receive what is due to you, you may want to consider evaluating the debt recovery solution you are using.

The first thing to do is to check the unpaid accounts you have and see how much has been returned to the company. Look into your debt collection strategy and compare how much is the amount you already spent for it. If you are company is simply sending out additional invoices to your debtors, usually one gets returns that will only cover the expenses used for those additional mailings. You may already be writing off those debts that are below $20 as you may not even get any of it because of the recovery expenses. Assess this situation and you may realize that this is a not a good strategy. It even wastes more time and effort. The same assessment should be done if you are using the phone tactic. In this strategy, patience and great communication skills are a must. This is because if you end up with a verbal confrontation with the client, you may lose a significant business account or may even end up with a lawsuit. So, this is not only time-consuming but also stressful.

For some who opt to use a debt collection agency, they may be efficient in recovering unpaid dues, but if you seem to be spending much then perhaps this method is not suitable for your company. However, if most of your unpaid accounts are B2B debts, then you may be using online debt collection. Most companies find this method more reliable because of the cheaper cost, faster debt recovery it does, and the control it gives to the company collecting the debt. Further, if you are using a combination of these strategies, then you may want to seek the assistance and guidance of financial experts on debt collection methods. They can provide better evaluations of your debt recovery solutions.

There are different ways to have your debtors pay you back, but from time to time you should evaluate the efficiency of your methods. Also, check the suitability of your debt recovery solution to the kind of unpaid accounts you have. Lastly, it is highly recommended that you seek professional aid on assessing and gain more knowledge on other possible techniques you can use.

What you need to know to become a Bill Collector

Surely bill collecting is not a job you have dreamt when you were a child but it is highly profitable nowadays. Plus, you don’t even need to have a college degree when you apply for this job. Aside from that, students, single mothers, and housewives are starting to apply for this job as it can be conveniently done at home. Bill collectors do not have to go door to door or face the debtors they can just call or email them. But more than these motivations, you must also consider the skills needed for this kind of work.

First of all, communication skill is a must. You must know how to talk and deal with different kinds of people. Remember that the people you are going to talk to are individuals who cannot afford to pay the due amount, while some just simply refuse to pay. So be ready to face possible hostile treatment from them. Patience is very important as well as articulate manner of speaking. Be empathic to their situation but persuade them to pay because that is your main objective. Do not forget that there are laws which protect these debtors so avoid using abusive tactics. For instance, start by writing to them first, and do not call them when they are working. Be professional and courteous to them. Aside from that, consider that a strategy you have used for one debtor may not work for another, so be sure to adapt well to each individual assigned to you.

Although, a degree is not required for bill collectors, it is highly beneficial if you have taken communication and finance courses. These can help you communicate better and assess well how best to approach the debtors. Further, it is also helpful if you are certified by ACA or the American Collectors Association as it adds credibility to your status. Moreover, becoming a member of The Association of Settlement Companies (TASC) or the International Association of Professional Debt Arbitrators (IAPDA) is a great way to gain more contacts. They may even offer trainings on the different methods of debt collection.

Lastly, it is not enough that you have that will and guts to be a bill collector. You need to be good in handling conversations and have that thick skin to be able to convince the debtors to pay. It is indeed a challenging job but with further education and association with organizations, you can polish more your skills. You can succeed and even earn great compensations as a bill collector.

How to Evaluate Debt Collection Quotes and Choose the Agency Best Suited For your Company

Collecting debts of delinquent accounts can be stressful, time-consuming, and sometimes expensive. Most probably, you may even receive returns that will just cover the cost of the debt collection. It is then, not surprising that a lot of companies opt to pass off this unpaid accounts to debt collection agencies. Hiring a collection agency can cost a lot so it should best be done when the delinquent accounts owe a significant sum of money. Aside from that, the said accounts must be about 60-90 days overdue as the older the overdue account is, the harder it is to be recovered. But how do you get a debt collection quote?

You can start of by researching debt collection agencies in your locale and check out if they belong to the Association of Credit and Collection Professionals International or other trustworthy trade group. This can assure you that that your prospects follow standard ethical conduct. Also, consider those which already have experience on handling companies like yours. They are most likely to be efficient and reliable. From your narrowed down list, contact the agencies and ask for debt collection quotes from them by giving information on the nature of your company and the kind of debtors you have.

After gathering the quotes, compare them. Some of debt collection agencies may take about 25-50% of what they will be able to collect. The rates usually depend on how old the accounts are and the amount of debt incurred. While some may also have fixed rates at monthly basis, or they may only charge per phone call or letter they make for you. Remember, however, that your assessment does not end there. Do an evaluation too about your company. How frequent are you going to use their services? How much can you spend for the fees to be paid for an agency? What structure do you think is best suited for your needs? Consider these questions in selecting which agency is best suited for you as you look into the debt collection quotes they have given. Do not forget that your aim is to have significant returns and not to have more loses.

Know well and evaluate carefully which will match your needs basing from debt collection quotes of your prospect agencies. Studying this guide, you may have already realized that reputation, reliability, and practicality are the keys to finding a debt collection agency fit for your company.

How Best To Deal with Bad Debt Recovery

Bad debts are one of those possible problems that a good businessman predicts. These are technically accounts receivable which will be written off as they have less chance to be collected. They would appear under the expenses of the company in its income statement, which then reduces the profit. As bad debts are inevitable, most companies have bad debt allowance to compensate for these expenses. However, some bad debts are paid eventually. This instance is then called bad debt recovery.

Most companies set up bad debt allowance. This allowance is an estimate of how much bad debts will possibly be written off as expenses by the company based on previous records. By doing so, when the income statement of the company is done, the entry has taxable income reduced by the bad debt allowance. When it appears that an account receivable may not be collected, the company taps the said allowance to reimburse the said debt. Thus, a credit entry will be done to the accounts receivable balance and a debit will become bad debt. But when a bad debt recovery happens, a credit entry will be made in the bad debt allowance while the accounts receivable will be debited of the same amount. This “washing” done creates a great paper trail for the bad debt recovery that had occurred.

What then balances the accounts and keep the paper trail of bad debt recoveries are the “allowance for bad debts” account. This makes the crediting and debiting between the accounts receivable and the bad debt expenses “clean” and neat. It is like the bad debts’ savings account, and helps your company to continue moving forward. Further, as mentioned earlier, it aids your company by preventing it from paying high taxes based on the income percentage which will later on be converted into bad debt. However, you must remember that the efficiency of the bad debt allowance rests on your good estimate on the possible bad debts expenses of the company for that period of time. So, it is very vital that you keep records of your previous income statements and make accurate predictions of your bad debt expenses.

Having bad debts are unavoidable so it is best that you plan ahead and prepare for it. Doing an accurate estimate of those probable expenses is essential and setting aside an account to compensate for it is a great way to handle the problem. As a businessman, educating yourself about bad debts and bad debt recovery can stabilize your profit margins.

How Best To Deal with Debt Collectors

Most people deal with debt collectors in a hostile manner. This is probably because of their embarrassment or simply because they do not want to pay the overdue bill. But remember that delaying the payment process and having and conversing rudely with the debt collectors may just worsen the situation. Some may even use your behavior as an excuse to harass you. So, no matter how you disdain communicating with the collectors, you must try to cooperate and handle conversations with them well enough.

Most debt collectors will surely speak in an articulate manner, so do not be intimidated with their tone of voice and manner of speech. Be confident when talking with them. Aside from that, arm yourself by reading about the Fair Credit Reporting Act (FCRA) and the Fair Debt Collection Practices Act (FDCPA). Know the statute of limitation in your state and see if the credit being collected from you is within the limitations. Ask politely for validation of your debt report, do this in writing and be sure that the debt collector will send you receipt of it. If you are uncomfortable or inconvenienced with the debt collector calling you from time to time, you may request that the collector should only contact you by mail or email. Under the law, the collector and his/her agency must grant your request. Be sure to check again for receipt of your letter.

After which, you may want to start liquidating some of your assets or make an assessment of how much can you afford to pay off your debt. Then, ask for debt settlement with your debt collector. It is fine to offer a lower amount of money than the actual debt you have incurred because most debt collection agency may have purchased your delinquent account in a low rate. Try hard but not harshly, to make the debt collector accept your settlement offer. Upon the collector’s agreement, make him/her put it into writing and have a copy of it. Contact the debt collector again request that other unpaid accounts you have on them must be written off and should not be passed on to another debt collection agency.

Lastly, what is important here is that you should be calm when dealing with debt collectors. Be sure to know your rights too and how to use them well, and make sure that you have a receipt on every letter you send to the debt collector or to the agency as this will then guarantee that no debt collector will hassle you again.

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