Choosing a Debt Recovery Agency

Choosing a Debt Recovery Agency When it comes time to choose a debt recovery agency, take a few extra minutes to find the right agency to work with. There are many different agencies located around the world. Many of them provide you with the highest quality resources while others are offering a lower price.

Which one should you work with? Which one should you work with? You have one shot here to get your accounts receivable paid and you want to make a good decision. Therefore, take these tips on how to choose the best debt recovery agency for your organization.

Step1: Know Their Debt Recovery Rate Any Company should be able to tell you what their debt recovery rate is. This is the amount of times that the debts the debt recovery agency has had successful cases. The higher this number is, the better the job they do is.

If you will be hiring a company with a high rate if you will be hiring a company with a high rate, you can expect to pay a bit more. Yet, that may be no problem considering they will be more likely to get you the funds back. Find out what they base their information on (how many cases have they handled and what is included and excluded from that figure.)

Step 2: Learn About Their Methods When considering a debt recovery agency, be sure you invest the time in finding a company that offers the methods of collection that work for you. Most will start and concentrate on mail contact.

If you have other contact information such as fax numbers If you have other contact information such as fax numbers, email addresses and phone numbers, these are also methods of contacting and working for the repayment of the debt. Many of the companies will also, do personal meetings. Some will offer litigation help, which means that if the case goes to court they will help you win it.

Step 3: Consider Your Costs While getting your money is important to you, you have to consider how much of a cost is acceptable to you when hiring a debt recovery agency. Not everyone is comfortable losing thousands of dollars on the purchase of the services form these agencies. Therefore, find the costs structure that works for you. Do not forget to negotiate with the company for a lower rate, which is often a possibility.

When it comes to hiring a debt recovery agency when it comes to hiring a debt recovery agency, take time to find the right company. You will save money in the long term if you invest some time now in the process. Most companies are more than willing to give you the information you need to decide to work with them. If they do not, you should wonder why.

What A Debt Collector Does?

A debt collector’s job is to collect money for the people you owe. In other words, debt collectors provide debt collection services for companies trying to collect on past-due debts. There are also third-party collectors who buy old debts for pennies on the dollar.

You may get a call from a debt collector if you are late on your credit card payment, if you have not paid your mortgage or car payment, or if you have other loans or bills that are in default.
Debt collectors can be aggressive and even hostile in attempting to collect money you owe. They may even make threats to scare you into paying them before you pay your other obligations. Do not let them bully you.

Instead, know your rights. With the information below, you will learn how to deal with debt collectors and how to begin taking charge of past-due bills on your own terms, once and for all!
Your Rights As A Debtor are:

• A debt collector cannot contact family, friends, neighbors, or employers regarding your debts.


• A debt collector may not contact you late at night or too early in the morning (typically between 8 am and 9pm).


• A debt collector cannot call repeatedly.


• A debt collector must identify themselves.


• A debt collector may not make threats.


• A debt collector cannot use obscene or abusive language.


• A debt collector cannot claim you are breaking a law if you are not.

Ten Tips to Successful Debt Collecting & Tips on how to collect debt

PREPARE: Review the paperwork on the debtor before making the call. Know the history of the account, credit record, the promises kept/broken. Have all records in front of you, ready for reference.

ATTITUDE: Adopt a straight, professional business-like attitude. You have a contract, you delivered the goods, money is owed, and you have a right to expect payment. Never let it become personal. Don´t yell or raise your voice; and NEVER swear. Don´t threaten; legal action is your recourse.

CONTACT: Make sure you´re talking to the right person. Don´t let the individual brush you off with "You´ll have to talk to the bookkeeper." Identify the person who will pay the bill. If you can´t get through after several calls, tell the secretary that you know your calls are being screened. Indicate the purpose of your call and if necessary give deadlines.

CONTROL: Control the conversation. Keep it focused on the debt and on the repayment schedule. Don´t let the customer sidetrack you with personal history, excuses, etc. Remember, the object of your call is to collect money, or get a commitment, not to become buddies with the customer or win arguments.

FLEXIBLE: Be ready to adjust to the situation. Think about the kind of customer you´re dealing with and adapt to meet the circumstances. Be prepared to accept a reasonable payment schedule, and a willingness to deal with a customer´s circumstances.

NOTES: Keep detailed, accurate notes of every contact with the customer. Probe for further information on the customer. Notes of these contacts will help you in subsequent phone calls, and may be invaluable in litigation. Good notes will also help in further credit decisions, or in cases where skip tracing may be needed.

PRODUCTIVE: Keep contact brief and to the point. This is a business call, not a social one. View your efforts on a ratio of time expended to results achieved. Long conversations probably mean the customer is stalling you, or trapping you in the buddy syndrome.

PRECISE: Never leave a contact open ended, such as "We´ll talk next week," or "I´ll send what I can." Every contact should result in a commitment to payment, of a specific amount, by a specific date, even the check number the customer is using to pay the pledge.

TIME: The longer an account is held, the less likely it is that it will be recovered. If payment or a payout is not arranged within 90 days, place the claim with a collection agency or start legal proceedings.

Debt Collection Tips Your Business Can Use Today to Collect Bad Debt

Knowing debt collection tips are important issues for almost every business or organization. While many businesses and individual professionals today prefer acquiring the professional services of a good debt recovery agency, there are certain important tips and strategies which you must know about debt collection, just so that you can work more effectively in case you decide or prefer to handle your past due accounts yourself in house, as well as give added input to the collection agencies concerned, if and when you opt to outsource them.

Debt collection tips can help you make the right decision while you are working on the collection of your past due accounts from your clients or customers who are yet to pay. Here are some such important debt collection tips that you might benefit from:

• Keep a Positive But Firm Attitude. Attitude is an important factor for a debt collector. While talking to the client for debt recovery you must have a positive and an upbeat attitude. You have to be firm as well as polite and your intentions of recovering the debt at the earliest possible must be made very clear to the debtor.


• Recognize that many business owners reluctantly pursue their past due accounts for fear of losing future business, and/or angering the customer. But know that a customer who continues to ignore his/her bills aren't likely to continue to do business with you anyway.


• One of the basic debt collection tips is that of maintaining communication. Don’t get tired and give up, especially in the case of small sums. Remember also, that a client or a customer, who is involved with you in business and is at least responding to your correspondence regarding paying a past due bill, has a fair chance of actually doing so.

Things To Consider Before Hiring A Collection Agency

Hiring a professional collection agency has its pros and cons. On one hand, it can facilitate the collection of outstanding debts. On the other hand, hiring a collection agency means extra costs the company must shoulder. Here are some things to consider before hiring a collection agency:

• The amount of the debt. Hiring collection agencies mean extra costs by way of fees. It also means the amount to be recovered from the debt will be discounted as these agencies normally demand a certain percentage of the recovered amount on top of their hiring fee. It may be more cost-efficient for the company to just write off the outstanding debts in light of the extra costs of hiring an agency in the long run.


• Location of the debtors and collection agency. The location of the debtors must also be taken into consideration. If the bulk of the debtors are headquartered locally, then it is more efficient to hire local collection agencies. If the debtors hold office out of state, then an agency local to those debtors or a nationwide agency is more appropriate. It is important to note that agencies local to hiring company are most likely cheaper than out of state or nationwide agencies.


• The company’s relationship with its customers. How well does the company know its customers? Customers with previously immaculate payment histories may have valid reasons for defaulting on their debts such as death, divorce, temporary unemployment or disability. In these cases, hiring a collection agency may facilitate the eventual settlement of the debts but could also alienate them and hurt the business in the future. The company must be able to provide solutions to customers with valid reasons for defaulting on their loans such as payment arrangements through a department other than the collections arm that will not only ensure the debt is eventually collected and the relationship between the company and customer preserved.


• Company responsibility. Companies should strive to improve their billing and accounting methods to protect themselves from bad debts. Certain companies incur bad debts due to negligence such as hospitals forgetting to bill the insurance or HMO companies of their patients. Individuals and companies will try to conceal their bad credit histories and companies must develop and establish company processes that will enable them to see through machinations of concealment and deceit. They must conduct sufficient background checks on the people and companies they extend credit to. If they extend credit to companies or individuals with bad credit histories, the possibility of that credit turning into a bad debt increases several folds.

Hiring a third party to collect debts may seem convenient at first but like all other business decisions, it is a decision that must be carefully evaluated on its short and long term effects on the company and its customers.

Are you in need of a Debt Collection Agency?

Debt recovery is a huge problem for business owners today. Most businesses do not have enough resources to give the proper amount of time and effort it takes to properly collect its past due receivables. Debt collections is a very arduous process, and keeping your in-house collection staff motivated to collect from abusive customers is difficult. Collection agencies can help with some of these issues.

When in comes to debt collections, what is common sense is not always common practice. Most of the time, the attempts to collect debt consume a lot of time and are very emotional. This in turn causes a great deal of frustration. If you find yourself emotional or angry about not getting paid, you might consider using a debt collection agency. Collection agencies and professional companies who's only function is collecting money.

Before Hiring a Collection Agency

There are several actions you can take to reduce the amount owed to you before resorting to debt collection agencies.Be careful when offering credit. Carefully check credit references of each new account and don't extend more credit than the firm can handle. Explain transaction terms thoroughly. When extending credit, make sure that accounts know when you expect payment, and clearly detail any credits or penalties for early or late payment. Try to follow the following points:-

• Do not expect customers to police themselves; instead, make sure to promptly send statements and reminders of payment due dates.


• Institute a series of overdue notices
  You should schedule regular written and oral reminders before even considering a collection agency. This will not only help save money, but will also avoid the ill will that can be generated when using a third party to collect the funds.


• Set an absolute due date and stick to it. As a final step, set an absolute due date before the account is turned over to a collection agency. Do not extend this date, but do give the debtor warning of this final payment date.

What Do Collection Agencies Do?

Collection agencies are businesses that collect past-due bills and accounts receivable for other persons or businesses in exchange for a fee. Collection agencies charge for their services one of three ways:

1) A flat fee.

2) A percentage of what is collected.

3) Through a direct sale of the delinquent accounts.

If you are trying to collect a small or medium sized debt, using collection agencies that charge a flat fee are probably your best option - collection agencies that charge a flat fee work just as hard to collect a small debt as they do to collect a large debt. Generally most collection agencies use one of three methods to collect debt:

1) Letters.

2) Direct contact via the telephone.

3) Litigation.

What Does Collection Agency Mean?

A company hired by lenders to recover funds that are past due or accounts that are in default. The lending company itself may also have a division or subsidiary that acts as its collection agency. A collection agency is often hired after a company has made multiple attempts to collect its receivables. At some point in time, every business that sells on credit or a medical practice, is going to have a collection issue. Some customer, client or patient, for whatever reason, is not going to pay your invoice or bill on time. This is when you need to leverage the 'fear factor' and consider hiring a third party collection agency.