July 23, 2010, Newsletter Issue #170: Performing Skip Tracing Services

Tip of the Week

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.

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