Get Your Money. Call Now 321-710-3530
We are experts at collecting debt previously deemed “un-collectable debt”.
GET A FREE QUOTEDebt Collection Agencies Are the Solution
Having money that is owed to you by a debtor is frustrating and can affect your business or day-to-day activities negatively, especially when the debtor refuses to stick to the set repayment plan timelines. So, what do you do when you have exhausted all approaches to have your debt paid but the debtor remains non-compliant?
If your debtor is unresponsive, you could opt to take the debtor to a court of law and file a civil case against them. According to most people’s experiences, however, this has more cons than pros. Courts take a lot of time to process bad debt cases and will take up large amounts of your time traveling to court hearings. Hiring attorneys, who in most cases charge hourly rates, can prove counterproductive since their fees can accumulate to an amount that exceeds what is owed. Moreover, the verdict from trying a bad debt case in court usually results in the debtor having a judgment entered against them but no action that forces them to actually pay it.
The more practical approach is hiring a debt collection agency that has experience in dealing with non-compliant debtors and collection of debts owed to creditors. The benefit of using a debt collection agency to recover what is owed to you is that debt collection agencies are relatively cheap and do not take up too much of your time. Most agencies charge their fees as a percentage of the debt to be collected, meaning that they are paid only after a successful collection of the debt.
Successful collection of bad debts in most cases happens when the debt is not too old. The debt collection agency is required by law to follow the correct procedure when collecting a debt. This procedure varies from one state to the other but the general framework for debt collection involves the following steps:
- Notifying the debtor of their debt and obligation to pay back what they owe
- Friendly reminder of the debtor’s obligation
- Issuing reminders of deadlines and consequential effects if the obligations are not honored in time
- Final notice to the debtor
- Legal action and third party involvement in debt collection
- Seizing of assets and auctioning to recover the debt
Tips when hiring a debt collection agency
When you are looking to hire a debt collection agency to collect a debt owed to you, follow the tips below to ensure your debt is paid and that the collection happens within the confines of law.
Licensing
Ensure that the debt collection agency you hire is licensed to operate in the location of your debtors. Debt collection agencies should also adhere to the Fair Debt Collection Practices Act that outlines guidelines that collection agencies should follow when collecting debts.
Consider an Agency that uses skip tracing
Many defaulters change their location when they have defaulted on a debt and are being pursued by the creditor, courts, or a debt collection agency. Finding such defaulters, therefore, can be difficult. To collect money from such debtors, consider hiring a collection agency that utilizes skip tracing when locating defaulters who have skipped town. The skip tracing technique allows the collection agency to have access to large databases that help locate debtors in different parts of the country. Ensure that the collection agency you hire is licensed to operate in multiple states and that they are up to date with the regulations that guide debt collection in those states.
Compare collection charges
Collection agencies offer debt collection services and charge their clients for those services. The charging models could vary from one agency to the other. Some charge a flat rate for debt collection services while others charge their rates as a percentage of the amount being collected, the age of the debt, and the complexity of contacting the debtor.
Ensure that the compensation model of the collection agency is properly outlined and that you are comfortable with it before hiring the agency to collect the debt for you. Percentage collection rates range between 30% to 50% depending on the agency and how long the debtor has defaulted. The benefit of using the percentage rate compensation model is that the agency only receives their cut when they are successful in collecting the debt.
One thing that you should keep in mind when hiring a debt collection agency is that you will not receive the full amount upon repayment of your debt. However, this is better than having to forfeit the full amount that is owed to you by your debtors.
If you are having trouble with debtors who are not repaying their debts, consider hiring a professional debt collection agency. The collection agency enforces debt repayments effectively, saves you the trouble of dealing with truant defaulters, and does this at a reasonable cost.
Get Your Money. Call Now 321-710-3530
We are experts at collecting debt previously deemed “un-collectable debt”.
GET A FREE QUOTE