Tips and Tricks for Legal Debt Collections

If a customer owes your local business money, it's hard not to feel angry, like you want to do anything possible to get your money back. But the days of going all out to collect on a debt over. The Fair Debt Collection Practices Act, designed to protect consumers from harassment or intimidation, sets firm limits on what you can do to collect a debt from a consumer. The federal debt collections law even prohibits practices that were once standard, and that you might not consider harassment at all.

Besides, as a local business, you have an even more powerful reason to be especially careful about legal debt collection issues. You have something much more valuable at stake than a lawsuit: your business's reputation in the community.

Legal Debt Collection Best Practices

There are plenty of articles on the web that lay out in plain English what the Fair Debt Collections Practices Act says you can and cannot do. Just to give you some idea of the law's requirements, here are some of the biggest:

* No telling any third party about the debt (except collection bureaus, collection agencies, or the debtor's attorney).

* No calling on the telephone 9 pm - 8 am, or calling repeatedly in a way that is annoying.

* No postcards or envelopes that mention the debt.

* No threats to take actions you cannot or will not really take, such as seizing property, in the case of an unsecured debt.

* No misrepresenting yourself (e.g., "Hi! This is the Publisher's Clearinghouse Sweepstakes. May I speak to John?").

* No paying down the debt with payments the customer has directed be applied to other debts

Tips and Tricks for Legal Debt Collections

With all these limits on what you can do to collect a debt, what can you do legally?

* Speak with the debtor personally on the telephone; most likely he or she wants to pay but is in over his or her head. Begin by asking what circumstance has kept him or her from paying. Offer to set up a repayment plan.

* You should both send letters and make telephone calls. Many people will only respond to one or the other.

Document every part of the collections process. Take notes for each call and keep a copy of each letter. If the debt does ever go to court, you will have proof you acted legally.

* Look into reporting the debt to credit bureaus. If you can, and are willing to do it, you can tell the debtor that not paying will impact his credit rating.

* Best tip of all: hand over the job to a dedicated collection agency. Small business debt collection services start at as little as $20 per debt. The fight to get paid is a fight no business should have to involve itself in.

Unfortunately, debt collections are a part of business. Just make sure that for your local business debt collection law is followed to the letter, or legal proceedings may become part of your business, too.

If you want to learn Collection Laws, then visit http://www.debt-collection-laws.com for the latest information on debt collection laws and collection agency regulation.

In The News:

Small Business and the Fight for $15  The Wall Street Journal
At SCORE, small business matters  Crain's Detroit Business
Golden supports small business  Kennebec Journal & Morning Sentinel
Business calendar  Chico Enterprise-Record
Asset Protection for Small Businesses  Baltimore Post-Examiner

Using Business Broker In the Franchising Industry for Franchise Sales

Franchising companies often use Business Broker to help attain sales... Read More

Organizing Tips for Small Business Success

If you discovered the bottom line in your business depended... Read More

Do You Own Your Business Or Does It Own You?

What was your aim when you went into business for... Read More

Lubbock TX Good Market for a Service Business

We very much like what we see in Lubbock, TX... Read More

The Game Plan ? The Difference Between Small Business Success And Failure

It is an American dream to own a business. But... Read More

4 Areas Where Your Business is Losing Money

In my 18 years of consulting I have heard it... Read More

How to Profit from a Concrete Roof Tile Business

Concrete Roof Tile Business: During the 2004 summer season, storms... Read More

A Day in the Life of a Self Employed Professional

It's Monday morning and Connie the Consultant sits in her... Read More

Solving the Late Paying Customer Blues

Nothing can drive a business down faster than customers who... Read More

Take a Break - Have a Pity Party

Pity parties are nothing new. In fact, we do it... Read More

Get Approved for a Franchise

Deciding to start your own franchise is just one of... Read More

Competition in the Market Place and Over Disclosure Regulatory Burden

The Federal Trade Commission is assisting competitor to cheat and... Read More

How To Ruin Your Business

If you're like the rest of us, you've spent a... Read More

Get Out Of The Rut And Back On the Track

Do you sometimes find yourself just going "through the motions"... Read More

Do You Want Your Own Fully Programmable ERP? - Part 2

In the first article we mentioned the main characteristics that... Read More

Marketing - The Way To Make What Youre Really Worth

You only have so much time in a day right?So... Read More

Reverse Merger: Have They Taken the Reverse out of Reverse Merger?

Are the promoters and consultants destroying the market for Reverse... Read More

Starting an Aircraft Washing Service

To wash an airplane there are many items you will... Read More

Quality Controls for Franchising Companies Sample Outline

Quality control in franchising companies is paramount and all franchising... Read More

Book Yourself Solid Key #5: Go Forward With Gusto & Articulate What You Do

Want your small business to flip instead of flop?! Statistically... Read More

Work is a Four Letter Word

I love work, I can watch it all day.I am... Read More

Build Credibility, Value, and Trust on a Shoestring

Setting priorities in your business? Your first job is to... Read More

Mobile Car Washes and Shoe Policies

Mobile carwashing is hard work, it is tough on the... Read More

Youll See It When You Believe It - Growing Your Business from the Inside Out

What unspoken message are you sending your clients and customers?... Read More

Do You Need the Help of a Virtual Assistant?

Running a business, whether large, small or in your home,... Read More