Collection Agency Tips

Tips on Unfair Debt Collection Practices

According to the guidelines outlined by the Federal Trade Commission, unfair debt practices include the following:

- Applying a payment to a debt that you are unaware of or do not believe you owe.

- The act of depositing post dated checks prior to the due date

- The collection of a debt greater than the debt owed; unless your state authorizes such charges.

- Make false threats regarding the confiscation of property

For more information on fair debt collection practices, visit the Federal Trade Commission (FTC) website at www.ftc.gov.

Tips on Hospital Bill Collections

Hospitals may seek payment according to the guidelines of your specific state laws. Generally, three to 10 years is the timeline in which most states allow hospitals to take legal action. Each state sets a statute of limitations (SOL) according to the type of outstanding debt:

- Oral agreements are undocumented agreements between two or more parties
- Open Accounts – are lines of credit that may be used repeatedly (includes credit cards, home equity lines of credit, department store revolving accounts and others).
- Promissory Note – is written unconditional promise to remit a sum of money

- Written Contracts – are deemed as written credit contracts (in example: car loans and mortgages)

For example, in Nebraska the statute of limitations (SOL) is four years for oral agreements, 5 years for written contracts, six years for promissory notes and four years for open accounts. To determine how long a hospital can collect a bill contact your state's Attorney General's office.

Delinquent Tenant Cooperative

The Delinquent Tenant Cooperative offers a forum for rental property owners to share negative resident information. The information shared ensures successful tenant screening. Never before has there been an opportunity for property management personnel to freely exchange this information on a nationwide basis. This allows landlords everywhere to help protect one another from the perils of bad tenants and people that don't pay their bills.

The Cooperative offers the following valuable information:

* Delinquent payment history patterns
* Property damage
* Suspected criminal activity
* Uncleanliness
* Chronic disturbances

Collecting Back Rents

Rent collection is another important facet of professional collection agencies. Some agencies have developed automated services for tenants designed to help ensure timely rent payments by invoicing tenants every month. This provides an easy reminder that payments are due, elevates rent payments to the same level of importance as car payments, and adds professionalism to the business of apartment management.

The IRS and Collection Agencies

The IRS is close to being able to contract with private collection agencies for delinquent taxes collection and this is expected to be the largest contract opportunity the collection industry has ever seen. The IRS has been authorized to collect on an estimated $250 billion in delinquent taxes and sees $120 billion as potentially collectable. Lawmakers hope that private agencies can bring in $1.4 billion in past due taxes over the next 10 years.