10 Tips to help you 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: Be sure you are talking to the correct person. Do not 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 not 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 customers circumstances.

NOTES: Always keep detailed, accurate notes of every contact with the account. Probe for further information on the customer. Notes of these contacts will help you in subsequent phone calls, and may be invaluable in litigation. Accurate notes will also help in further credit decisions, or in cases where skip tracing may be needed.

PRODUCTIVE: All call should be brief and to the point. This is a business call, not a social hour. View your efforts on a ratio of time expended to results achieved. A long conversation typically means the customer is stalling you, or trapping you in the buddy syndrome.

PRECISE: Never leave a call open ended, such as “Well talk next week,” or “Ill send what I can.” Every single call should result in a commitment to some kind of payment, You need a specific amount, by a specific date, even the check number the customer is using to pay the promise.

TIME: The longer an account is outstanding, the less likely it is that it will be paid. If payment is not arranged or a payment plan is not established within 90 days, place the claim with a collection agency or start legal proceedings.

PLACEMENT: The best collection agencies do not need to pay money to get your information. Just type in “Collection Agency” to any search engine and pick a firm that ranks organically.

Mallory Megan works for a collections agency that works with a debt collection lawyer. She also does stories on business and finance, the credit industry and collections agencies.

The main point is, the more time that passes between the time the payment was owed and the time the consumer is contacted, the less likely you are to packet any sort of payment. If you’re serious about making a turnout, there are three ways to handle collection on past debt; in house efforts, hiring a collection agency, or taking legal action.

Collecting the debt by yourself: If the debt is new or small, you’ll most likely start by trying to collect the debt yourself before hiring a collection agency or a lawyer. The most efficient way to start the process of collecting an unsettled debt is by calling the debtor. Many nonpaying customers can talk a great talk on the phone, but then never deliver. If the business is local, aspire to make an appointment with their finance manager to talk face to face.

Another productive way to motivate patrons to make a payment is by utilizing a 10 day demand letter. Some collection agencies offer a free 10 day demand letter service that includes postage and mailing of a demand letter sent on official collection agency letterhead. Many times, this is enough to get your customer to part with their payment.

Hire a Collection Agency: Many small businesses don’t initially think of hiring a collection agency to collect overdue debt, but of the outsourced solutions, a collection agency is usually the most cost effective and gets the best results. With a collection agency, you don’t pay until they collect the debt, meaning that the collection agency is highly driven to find a way to get the customer to pay. Because they don’t get paid unless you do, a collection agency tends to work fast and much more efficient when working on a contingency basis.

Today’s current collection agencies don’t use scare tactics or bully customers. Besides, not all clientle who are behind on payments are deadbeats. When you choose a collection agency, make sure one of its goals is to maintain extreme professionalism and one that fallows the FDCPA diligently.

Taking the legal path: Another alternative to collecting a debt is to take legal action whether by taking the debtor to small claims court or by hiring a lawyer to pursue the debtor.

Mallory McGuinness is employed by a collections agency that works with a debt collection lawyer. Also, she composes pieces on business and finance, consumer spending and collections agencies.

I sit at my desk completely frustrated with Advanta. I opened up a business credit card with them 3 years ago and made a purchase of $6500 to help build my business credit for Rapid Recovery Solution, my Collection Agency. I have paid more then the minimum every month, on time. About 3 months ago noticed that my interest rate seemed a little high. No where on my statement did it say the actual interest rate so I called the company. After 10 min or so I get a live rep on the line and they tell me it is 36.1%. Are they kidding, this must be a mistake. I have over a 750 score and never missed a payment. They said they sent me a notice in Aug that they are doing this due to a change in there lending methods. It turns out this is the second time this year they did this. I went from 8.99% in Jan 08 to 18.99 in Feb 08 to 36.1% in Aug 08.

Now, being in the industry for over 10 years I know that I need to watch my credit. I look for charges I didn’t make and it is tough to scam me. I have seen it all but this takes the cake. They told me I am now at a high risk for default so that is why they raised my interest rate? That doesn’t make any sense. They should lower my rate if they think I will default on my credit card. How will an increase in what you are charging me keep me from defaulting. Luckily, I have the ability to pay off this card today but I want everyone to realize that these companies have you by the short-n-curly’s. Watch your statements and lookout for this scam.

FYI, In NY, the maximum interest rate is 30%. They are charging me more then the maximum allowed in my state. I will send a letter to the BBB, the NY Attorney General, the UT Attorney General and the Department of Consumer Affairs.

As a nation we are in deep trouble. If a credit card company can just raise my rate because they feel like it I am positive that 99% of their customers are also paying 36.1%. How many other credit card companies are doing this to innocent people? We need to fight back. I am going to tell as many people as I can.

Unfortunately, there is nothing we can do except payoff the card. I was told I am a high credit risk. I paid the bill in full after I realized the rate was so high and the next month I received another bill for more finance charges for about $255. I paid that bill in full. I just received another bill in the mail for $5.65 and my rate was changed to 37.99%. Another point higher.

I had a few minutes so I called again to see why the rate went up again and they said “Sir, you have been classified as a very high credit risk and as a company we can’t risk you not paying your bill with us.” I said “I just paid my bill in full with your company, I have never had a late payment with your company in three years, I have one mortgage on my house for $290K, 25 years left at a fixed rate of 5.375% and it is worth over $500k and almost zero credit card debt personally. I am in the fastest growing industry right now, CNBC expects the debt collection industry to grow at 25% a year for the next decade. What else would I have to do to receive a better rate?” The extremely rude lady said “Sir, you would need to send a letter to Santa Clause and maybe he can help you out.”

The Government should put a maximum rate in place for the next year or so on all credit card debt. If the credit card companies are truly worried about consumers defaulting on their obligations, wouldn’t it make more sense to lower the rate so we can continue to make the payments? By raising the rate, it only makes it harder to pay and more likely that a consumer will default. The credit card companies are preying on the weak right now hoping you don’t pay so they can pound you with the highest interest rate. When you do default, they now have a higher balance to sell to a collection agency. In my eyes, this is a crime.

The Government doesn’t care either. Instead of giving the banks 350 billion dollars, They could have sent $1151.98 to each US citizen to pay towards credit card debt. The banks still get the money but we the people get a little break on our bill. The average family of four would receive $4607.92 to pay off a credit card. They reason that the banks need the money so they can lend money again to us? Are they crazy? All the banks did was raise the interest rates on our cards and pocket the money without ever having to say what the money went towards. No accountability!

Now the geniuses in Washington are considering giving billions to the auto industry so they can produce more shit cars that we can’t afford. How about giving the money to everybody with a current auto loan so we can pay for the car we already have. The money would still flow to the banks and auto makers via we the people.

Good luck America, your gonna need a miracle.

I feel better now. I was very upset prior to writing this blog. I hope everybody reading this realizes that if it can happen to me it can happen to anybody.

John Monderine Rapid Recovery Solution, Inc.

John Monderine is the President of Rapid Recovery Solution, Inc. a Debt Collection Agency. If you need help getting your Accounts Receivable collected visit his Collection Agency website for a no obligation free quote.

You should call in a credit collection agency sooner rather than later. The longer you wait to begin the collection process on overdue accounts, the less of a chance you’ll have at recovering your money.

The day after an account becomes overdue, you should place a polite phone call to the customer who owes you money. If that doesn’t work, you may want to send a few reminder letters yourself, or you may want to go directly to a credit collection agency. Base your decision on how much money is owed to you and the history of your relationship with the customer. If it’s the first time you are doing business with them, you’ll want to call in a credit collection agency earlier than you would with a 10-year customer with a solid credit history.

Most companies call in a credit collection agency once a debt is 60 days to 90 days past due. If you wait much longer than 90 days to begin recovering unpaid receivables, your chance of collecting drops dramatically.

If you discover that your account has gone out of business, find out what type of business it was – a corporation, a partnership, or a proprietorship. If it was a corporation, don’t even bother calling for the help of a collection agency. It is doubtful that you, or any one else, will be able to squeeze the last few nickels out of that client. If the company is a partnership or a proprietorship, you may be able to get the individual owners of the company to pay you out of their own pockets.

If you try to recover an account and fail, consider that bad debt a tax-deductible item (Tax Code IRC 166, Reg. 1.166). You will be able to deduct the cost of the goods sold (but not paid for) as an ordinary business expense. You can’t deduct any lost profits from the sale, nor can you deduct the money owed for services rendered.

Mallory Megan works for a debt collection company. Also she does articlesabout finance and business, consumer spending and collection agencies.

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