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If the business owner determines that he/she is going to send a charged-off account to a debt collection agency, the owner must first write a form letter to the agency. Next, by law, once an account has been turned over to an agency, it must send a formal notice to the debtor. In addition to making it clear that the account is now in its hands, it provides an opportunity for the debtor to dispute the debt or a portion of it. Often the debtor will acknowledge the original balance, but balk at paying interest and/or penalties. Your settlement figure will give the collection agency some latitude when it comes to negotiating. Once the deadline for replying expires, active collection activities begin. Bringing an debt collection agency on board makes it clear to the debtor that the account has been taken out of the business owner's hands. This will relieve the owner of a significant amount of time and emotional strain. Debt collection agencies are of great value when teh debtor has skipped, as good collectors are masters at tracking people down. Do not begrudge the agency its commissions. Anything it brings in goes directly to your bottom line, because you as hte owner have already written off the balance. Be flexible when it comes to settlement arrangements. It will increase the likelihood that the debtor will be willing to make a deal and start paying. Once you, the owner, turn the account over to an agency, let it work on it for you. When there is anything to report, it will contact you. And when it collects, it is required to remit promptly.