Knowing Your Options Before Collecting Back Payments

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Knowing Your Options Before Collecting Back Payments

 

Running your own business in today’s world can have amazing benefits. However, there are also many risks that are easy to overlook when just getting started. Clients will often refuse to pay you for your services, or pay late when you need the payment immediately; these unruly business associates can cause your business to collapse. If your clients refuse to pay you for your time, energy, and expenses, it can seem as if you have lost control; however, you do still have options. The following are the different choices that you can choose between when it comes to getting the money your business needs from the clients that owe it to you. We have also listed the pros and cons of each available option.

 

#1. Handle the Process Yourself

 

The first option we will cover is the possibility of handling the collection process yourself. A business owner can save money by taking this route, since you can cut out most of the middlemen involved in debt collection. Handling the process yourself is the cheapest way to deal with a client that won’t pay. You will need to send letters to the delinquent client and possibly travel to their place of business to remind them that you still need to be paid; this will take time, and if you are like most business owners, you don’t have a lot of extra time. Another problem a business owner might discover when collecting their own debts is the fact that it rarely turns out profitable for the business owner. You can send as many letters as you want and bang on their business door until your knuckles are sore, but the client is still likely not to pay you.

 

#2. Hire an Attorney

 

The next option to consider is the possibility of hiring an attorney to aid in the process of collecting your money. Sending letters written by an attorney tells clients that you mean businesses and are not afraid to take the debt to court if needed. Lawsuits are expensive and nasty situations in which to find oneself, and being on the defensive side of a suit is even uglier; therefore, many people pay their debts as soon as they hear from a lawyer. Now it is time to mention the cons of hiring a lawyer. Whenever you hire a lawyer you will need to pay them well, which will most likely be more than you are owed. Much of the time when a business owner hires an attorney to collect fees, they end up having to pay the lawyer more than they will receive when they are finally paid. When hiring a lawyer, you also have to worry about the delinquent client never paying you the money they owe; people are not always able to pay their debts, in this case you end up paying your lawyer fees and never see a penny of the money that you were owed. Taking a debt to court is often more expensive than it is profitable. Hiring a lawyer is a direction that should only be considered in situations when someone owes you an extremely large amount of money, and only if you or your business can handle the lawyer fees directly out of pocket and as soon as they need to be paid. For many business owners, hiring a lawyer is not a sensible option, you could get in more fees than you will be paid from a suit, ending up in debt yourself.

 

#3. Hire a Collection Agency

 

The final and most promising option that needs to be presented to you is the possibility of hiring a collection agency. An agency can do the ugly jobs to which you would normally have to give your time. An agency will write the letters, make the phone calls, and take all of the other ugly jobs that are involved with you getting your money. Their letter and phone calls often will get a better return than your own would, and they will also be able to keep the drama down that you will face if collecting your own debts. Hiring a collection agency is a cheaper method of collection than hiring a lawyer. A collection agency will also take most of the stress off of your, the business owner’s, shoulders since you won’t have to worry about making phone calls to debtors. Hiring a debt collector is the absolute best way to ensure that you get your money. You will get the expertise of a professional without the fees that come with hiring a lawyer.

 

Get Your Money. Call Now 321-710-3530

We are experts at collecting debt previously deemed “un-collectable debt”.

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