Debt Collection Agencies

Outstanding bills or unpaid debts are unhealthy for any business. It can hamper its growth and cause wastage of time and resource. It is not possible for business owners to chase after the unpaid bills as there are much more important issues that demand their attention.

Furthermore, in-house debt collection efforts may not be consistent and effective enough to recoup the money from the delinquent debtors. In such cases, you must seek help from debt collector companies.

Outsourcing to a third party and knowing when to hire a debt collection agency is an important decision to consider when you are running a business. When you extend credit to your customers, there is always a gamble because even those who have excellent credit history may miss payment for face a financial crunch. Despite of the unfavorable circumstances it is important that the customers make payments on time or at least inform you regarding a late payment.

In case they don’t, it becomes essential to seek help of the debt collections companies who would follow the right legal course to get the customers make their payments or make arrangements to settle the debt. One significant reason behind this is that your delinquent accounts begin to depreciate at a rate of 15% per month. Hence, it is important to take the right action before it’s too late. Before hiring a debt collection company, here are a few things that you must consider and verify:
∑ You must ensure that the bill collection agency is licensed in the state(s) where your debtors are located. As the regulations vary from state to state, the debt collection agents must be well-versed with the law in each state.
∑ Ensure that the bill collection company has been in the business for long and has a well-experienced a debt recovery agent working for you.
∑ Fee structures vary greatly with different collection agencies. Some agencies offer prepaid, flat fee arrangements, while others charge a ratio of any bill collected.