November 23, 2007, Newsletter Issue #115: Debt Collection Agencyīs Recovery Rates

Tip of the Week

Itīs not important to know what an agencyīs rate of collection is, because every debt is different. The only rate that matters is what percentage the debt agency will take and if it actually collects something. It is helpful to the agency (and the attorney) if you as the business owner have a bottom line figure in mind when negotiating a settlement. Yes, itīs depressing to think about a debtor getting away with anything but settlements are frequently the only way that at least some money can be recovered using good debt collectors. Agencies (and attorneys) will naturally want to collect as much as possible, because they are being paid on a contingency basis, which means they receive a percentage of what they collect. They also have an inclination to work out settlements, so that they can guarantee making something acceptable on the deal. Effecting debt collections takes time, which means that is costs money to make the effort. One way or another, it is going to cost you as the business owner money and good debt collection agencies are worthy of their hire, as are good attorneys. since you the owner have already successfully written off the past-due balance on the books, anything that comes your way is found money. Itīs only fair that you split the proceeds with the person(s) who helped you find it.

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