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.

PLACEMENT: Use only an agency that is a member of the American Collectors Association OR the Commercial Collection Agency Section of the Commercial Law League of America. This will insure that you´re dealing with ethical professionals who are fully bonded to guarantee your remittance.

B2B Relationship

About debt collection letters:

Here is a sample collection letter to send from one business to another business who is behind making their payments:

(Your Letterhead)

(Address Element) (Date)

RE: Your Past-Due Account

Dear Mr. John Doe, owner of Business 1,
I must confess that I am somewhat perplexed by your refusal to at least return my phone calls. Your surprising failure to communicate has left me no choice but to close your firm's credit line with us. We have supplied high quality goods and services to you in a timely manner, fully living up to the terms of our agreement. In return, we expected you to meet your obligations. Past-due accounts are charged interest at a rate of _________. This means that, as of today, your original balance of $________ has risen to $________, and the balance due will continue to grow. I hope that you will give this important matter the full attention it deserves by calling me today and making arrangements to keep your part of the bargain.

Sincerely,
Owner of Business 2

Oregon Collection Agency Laws

Following is some important information on Oregon state statute of limitations including: Oregon Statutes, Oregon Judgments, Oregon Garnishments, Oregon Interest Rates, Oregon Bad Check Laws and Oregon Collection Agency Requirements.

INTEREST RATE
Statutory + Judgment: 9% simple interest per annum (Unless specified by contract)

STATUTE OF LIMITATIONS (IN YEARS)
Open Acct.: 6
Sale of Goods: 6 (4 yrs UCC Transaction)
Written Contract: 6
Domestic Judgment: 10 - Renewable at 10
Foreign Judgment: 10

BAD CHECK LAWS (CIVIL PENALTY)
Can recover reasonable attorney fees & statutory damages of three times the amount of the NSF check plus$500 if demand letter is sent to debtor 30 days before suit is filed.

GENERAL GARNISHMENT EXEMPTIONS
75% of disposable earnings or 40 x fed. min. hourly wage.

COLLECTION AGENCY BOND & LICENSE
Bond: No
License: Registration only
Fee: Established by director
Exemption for out-of-state collectors: Contact state authorities. Out-of-state agencies may be exempt if [1] collecting for out-of-state client; [2] the debt was incurred by an Oregonian outside the state; and [3] the state where the collection agency is headquartered has a registration program comparable to Oregon's law.

Louisiana Collection Agency Laws

Want to learn more about state by state debt recovery? What about debt recovery in Louisiana?Following is some important information on Louisiana debt recovery laws including: Louisiana Statute of Limitations, Louisiana Judgments, Louisiana Garnishments, Louisiana Interest Rates, Louisiana Bad Check Laws and Louisiana Collection Agency Requirements.

INTEREST RATE
Legal: 9.75%
Judgment: 9.75%

STATUTE OF LIMITATIONS (IN YEARS)
Open Acct.: 3
Written Contract: 10
Promissory Notes: 5
Domestic Judgment: 10
Foreign Judgment: 10

BAD CHECK LAWS (CIVIL PENALTY)
After 30 day written demand (certified or registered), twice check amount. Attorney fees & court costs

GENERAL GARNISHMENT EXEMPTIONS
75% disposable earnings per work week, but not less than 30 x fed. min. hourly wage.

COLLECTION AGENCY BOND & LICENSE
Bond: Yes - $10,000
License: Yes
Fee:
$200 Initial
$200 Investigation
$200 Renewal
$100 Branch
$100 Branch Renewal

State Collection Agency Laws

Many states impose responsibilities, liabilities and penalties upon companies for activities of debt collectors engaged by them in the collection of debts. You can be held accountable for what your debt collection agency laws or collection attorney does or doesn't do. You must know the facts, and the information here can reduce your liability by giving you the information for making informed decisions. Please study our collection agency laws directory for free information regarding the collection of your receivables.

State debt collection laws vary, and knowing the right collection law for your state and your debtor's state is essential. Explore this site to discover: Collection Agency Locations, Statutes, Judgments, Garnishments, Interest Rates, Bad Check Laws and Collection Agency Requirements.

New Jersey Collection Agency Laws

Following is some important information on New Jersey debt collection laws including: New Jersey Statutes, New Jersey Judgments, New Jersey Garnishments, New Jersey Interest Rates, New Jersey Bad Check Laws and New Jersey Collection Agency Requirements.

INTEREST RATE
Legal: 6%
Judgment: No Statutory Provision

STATUTE OF LIMITATIONS (IN YEARS)
Open Acct.: 6
Sale of Goods: 4
Written Contract: 6
Domestic Judgment: 20
Foreign Judgment: 20

BAD CHECK LAWS (CIVIL PENALTY)
N/A

GENERAL GARNISHMENT EXEMPTIONS
$142.50 wk. min. 10% of gross earnings $142.50 & Over

COLLECTION AGENCY BOND & LICENSE
Bond: $5000 Surety
License: No
Fee: No

Performing Skip Tracing Services

Debt collection agencies can be invaluable in cases of missing debtors. Let's say you have not idea where to locate a debtor, his or her phone number has been disconnected, and the person's mail is not being forwarded. If you have the debtor's driver's license number (it should be on the credit application), you may be able to do some skip tracing and find the person's new location. However, debtors who skip town to avoid their debts (and they usually have several) are usually smart enough to know how to avoid their creditors. There are courses and books on the "how to's" of skip tracing, and if you can afford to invest the time it takes to do the skip tracing, then by all means to try locate the person yourself and collect your money using your credit collection services. But skip tracing is extremely time consuming and once the debtor is found, he/she is usually in another state. You must familiarize yourself with the laws of that state, and depending on the size of your business, the odds of collecting your money are slim. Even if you successfully sue the consumer in small claims court, the small claims court has no power to enforce payment and you are still left with the task of trying to collect on your judgment. It is better to invest your time in collecting money from people who are within your reach.

Tenant Screening

More tips on avoiding bad debt: Tenant screening used to be a manual process that required the property manager or a service to check references and application information - a time consuming and expensive process! If you are a first time property manager, you are lack the sophistication to evaluate an application. You don´t know what you don´t know! If you hire a service it can take too long and cost more money than its worth.

Online tenant screening services eliminate all of these problems. Internet-based real-time tenant screening services can feature systems that help landlords to establish a tenant profile (the type of tenant they are looking for) based on multiple parameters. The system evaluates each applicant and tells the prospective landlord “recommend” or “not recommend.”

The service also evaluates the credit of a potential tenant. Some of these services also checks applicants against eviction databases and perform criminal background checks.

If you register for a service like this you can also often report your delinquent tenants to Experian, Equifax and TransUnion as well as to organzations like the Delinquent Tenant Cooperative who offer consultation and advice.

Massachusetts Collection Agency Laws

Following is some important information on Massachusetts debt recovery laws including: Massachusetts Statutes, Massachusetts Judgments, Massachusetts Garnishments, Massachusetts Interest Rates, Massachusetts Bad Check Laws and Massachusetts Collection Agency Requirements.

INTEREST RATE
Legal: 6%
Judgment: 12%
Contract: 12%

STATUTE OF LIMITATIONS (IN YEARS)
Open Acct. on Contract: 6
Contract: 6
Sales (UCC) Contract: 4
Domestic Judgment: 20 (presumed satisfied after 20 years)
Foreign Judgment: 20
Contracts Under Seal: 20

BAD CHECK LAWS (CIVIL PENALTY)
Amount due, costs of suit, protest fees
Additional damages $100 - $500 can be assessed.

GENERAL GARNISHMENT EXEMPTIONS $125 week

COLLECTION AGENCY BOND & LICENSE
Bond: $10,000 - $25,000
License: Yes
Fee: Determined by commissioner

New York Collection Agency Laws

Want to learn more about state by state debt recovery? What about debt recovery in New York?Following is some important information on New York debt collection laws including: New York Statute of Limitations, New York Judgments, New York Garnishments, New York Interest Rates, New York Bad Check Laws and New York Collection Agency Requirements.

INTEREST RATE
Legal: 16%
Judgment: 9%

STATUTE OF LIMITATIONS (IN YEARS)
Open Acct.: 6
Written Contract: 6
Domestic Judgment: 20 (1 0 yr. renewable lien)
Foreign Judgment: 20 (1 0 yr. renewable lien)

BAD CHECK LAWS (CIVIL PENALTY)
Face value of check plus two times check amount up to a maximum of $400 on NSF or $750 on "no account" (Demand prescribed by law). GEN.OB.1.1-104

GENERAL GARNISHMENT EXEMPTIONS
90% of earnings, except 1st $127.50 wk. wholly exempt.

COLLECTION AGENCY BOND & LICENSE
Bond: No
License: No
Fee: No
Buffalo: $5,000 Bond - $50 fee
NYC: License - $150 - 2 yr. fee