Debt Recovery – Utilizing Debtor Exams to Collect on a Judgment

You have initiated a lawsuit and won a Default Judgment against the debtor. Judgments are worthless unless you can locate and garnish the debtor’s assets, however.

You have initiated a lawsuit and won a Default Judgment against the debtor. Judgments are worthless unless you can locate and garnish the debtor’s assets, however.
Continue reading “Debt Recovery – Utilizing Debtor Exams to Collect on a Judgment”

The Psychology of Commercial Debt Recovery – Part One

Millions of businesses, especially small to mid-sized firms, want to grow and prosper by serving their customers well—but they also expect to be paid promptly for their product or services. In our twenty plus years in the commercial debt recovery business, we’ve observed a universal fear among people in business:

Millions of businesses, especially small to mid-sized firms, want to grow and prosper by serving their customers well—but they also expect to be paid promptly for their product or services. In our twenty plus years in the commercial debt recovery business, we’ve observed a universal fear among people in business: They want the money they’ve earned but they’re deeply afraid to press too hard lest they upset customers who not only might not pay but could also take their business elsewhere. These customers might also tell all of their friends now bad that business was. That fear needs to be taken seriously, even by giant corporations with similar concerns.

With the knowledge gained from assisting thousands of companies worldwide in recovering their receivables, we’ve found that most credit department managers like a relatively mechanistic approach. Meaning they want to know about the various kinds of debtors, the different incentives that motivate people to pay, and the ways of communicating these messages to debtors. Credit managers also seek excellent legal forms and information.

For instance, here are questions to ponder:

  1. What do you do if the debtor isn’t motivated to pay?
  2. How do you learn to listen to what a debtor is really saying (or not saying) versus what words he’s telling you?
  3. How do you learn to handle any type of resistance for being financially responsible?
  4. How do you get your company to create and communicate a clear payment policy to all customers, so they know the exact the rules of the game?
  5. How do you get sales and credit working together?
  6. How do you keep the boss from interfering in credit granting or collection matters when that’s damaging to the business?

These and other questions are psychological in origin. Facts and systems alone won’t give satisfactory answers. Here’s another question: How can you ask for money effectively and confidently when you’re usually uncomfortable doing so? Many people are uncomfortable about asking for payment, and the typical solutions usually don’t provide relief.

This series, which focuses on the psychology of commercial debt recovery can by used as a training guide for salespeople as well as credit managers and collectors. Collection issues can sink a business and are a symptom of a systemic fear about how the business is positioned in the marketplace. Collection problems that are systematically addressed affect a business as much as improved sales.

What’s the Big Deal About Collecting?

Money evokes strong feelings that can end in violence and the odds of winning when gambling in a casino are slim to none. But because the payoff from gambling can be huge—greed, hope, or desperation let the mind forget the odds, as do the state lotteries.

These examples illustrate that money matters deeply. Collecting money for a product or service that was provided is serious business.To a business, collecting means getting paid—in full, on time, and without hassle. Accounts receivable is usually the second largest tangible asset of any business, after planning and equipment. Collecting that money is a major concern.

For a business, recovering outstanding debt can present major obstacles. In our next article in this series, we will analyze the main reasons for the obstacles. The magnitude, persistence, and complexity of the problem can prevent businesses, large and small, from achieving their full potential. Not only that, it’s irritating to not get paid as promised. Surprisingly, the nature of collection problems is the same for both small and large businesses, but one would surmise that the larger, more established companies would have the experience and systems in place to spot and correct collection snags before they occur, but this isn’t the case.

In our twenty years of commercial debt recovery, consulting, and training of every type of business, there is a simple explanation. The common denominator is people. Business is people interacting with other people, and human beings express themselves in a variety of ways. The exchange of money for products and services is not a mechanical process. Even with clear and written credit and collection policies, breaking or bending the rules can be justified easily.

Small companies are especially vulnerable. Because they watch their accounts receivables closely, what may not be clear to them is how to best manage those receivables in light of the company’s other goals such as growth, new products, and diversification.

To some business people, the way to deal with collection worries is to finesse them by selling more. But that’s almost like the gambling system that calls for doubling the bet each time you lose. That one last bet can wipe you out.

Let’s compare selling to collecting based on a business that earns a 20 percent profit before taxes (PBT) on sales. Start with a $1,000 sale that, if paid for, results in a $200 PBT. Suppose the buyer doesn’t pay. What are the choices for replacing $200 profit?

  1. Invest another $1000 to produce a comparable sale and the resulting $200 profit.
  2. Invest $100 in a collection effort to get paid for the original sale and pocket the same profit.

This example is simplistic, but the comparison is valid, pointing to the need for clear, analytical thinking about two key business issues:

  1. How much should be invested in the credit and collection functions?
  2. What should the company policy on granting and enforcing credit be?

Stay tuned for our next article in our series, focusing on the obstacles of debt recovery.

Advanced Debt Collection Techniques, Part Two

At the Stevens-Lloyd Group, in addition to utilizing our unique blend of incorporating phone calls, strong written communication skills and litigation, we also utilize more advanced debt collection techniques. These include Writs of Execution, Bank levies, and Wage garnishments.

At the Stevens-Lloyd Group, in addition to utilizing our unique blend of incorporating phone calls, strong written communication skills and litigation, we also utilize more advanced debt collection techniques. These include Writs of Execution, Bank levies, and Wage garnishments. These advanced debt recovery techniques will assure that your money is recovered in the most expeditious fashion.

What is a Writ of Execution

A writ of execution (otherwise called an execution) is a court order used to put a judgment of ownership into power after it’s obtained by the offense from a higher court. When issuing a writ of execution, a court will commonly assign a sheriff or other comparative authority to claim property. Such property will often then be sold by the sheriff and the funds returned to the creditor in fulfillment of the judgment. The sheriff can essentially put a bank garnishment into effect from the debtor company’s bank or seize property. If the judgment account holder possesses genuine property, the sheriff can record the execution to “solidify” the title until the point that the execution is fulfilled.

By and large, a Writ of Execution is an effective means for creditors to recover monies against professional debtors who deliberately avoid paying their bills. When these debtor companies ignore judgments filed against them, creditors can consequently utilize writs of execution to enforce and uphold judgments.

In the United States, not all assets are liable to execution, however. For instance, Social Security income is excluded from a Writ of Execution. Numerous states also specify that an Individual Retirement Account (IRA) cannot be affected by this procedure and that claims against unemployed debtors are also excluded from Writs of Execution.

Obtaining a Writ of Execution

Before you can impose on a debtor’s wages or other property, court authorized judgment is required to file for a Writ of Execution, Writ of Garnishment, Writ of Connection, or comparably titled report. In many states, you can obtain writs in a small claims court for totals less than $5,000—for a comparatively small expense.

Once the court issues your writ, your debt collection attorney will transfer it to the sheriff, marshal, or constable in the area where the debtor operates. We recommend that your commercial collection attorney file with the court as soon as possible in order to effectively seize the debtor’s assets. Additionally, the creditor is required to provide money for court costs, bank garnishments, and other legal expenses. These expenses typically cost an average of $500.

We also recommend that your debt attorney not delay in filing the writ. A writ of execution will be terminated if it isn’t executed by the sheriff, marshal, or constable inside a specific number of days. If time runs out, you’ll need to obtain another writ of execution. Wait to obtain a Writ of Execution until your debt collection attorney has determined property, wages or other assets which can be taken.

In general, here are the parameters for obtaining Writs of Execution:

Special Civil Part court officer – for cases under the watchful eye of the Small Claims Court (debate is under $3,000), Special Civil Part (contention is under $15,000), or Civil Part (discussion is more than $15,000) in accordance with the Judge’s request.
The writ of execution can put a demand on the debtor’s bank accounts with the exception of exempted money, personal property, and motor vehicles—if the vehicle is enlisted in the judgment-account holder’s name.

Bank Levies

If your debt collection attorney obtains a court judgment against the debtor, he or she will have the authority to approach the court for a bank levy. A bank levy is the procedure where the plaintiff of the judgment seizes the money from the debtor’s bank balance to satisfy a court-ordered debt. When a levy is issued, the debtor’s bank account is encumbered, which means they can’t access the money in that account until the debt has been repaid.

If your collection team knows where the debtor company or individual does their banking, the commercial collection attorney can arrange a sheriff, marshal, or constable to take the debtor’s assets and obtain whatever funds are available, which are also subject to exemptions. This procedure typically only works once since the indebted person is likely to move his or her assets from the bank account you garnished.

Recovering Debt from a Judgment Debtor

 

You’ve won your case, and the other party (the debtor) owes you money. Great! Nonetheless, there’s still much work to do. Presently, you must move forward to collect. If you know where the judgment indebted person works, you’re on the right track.

What are Wage Garnishments?

Wage garnishment is a legitimate process through which a portion of a U.S. taxpayer’s income is required to be withheld for the payment of a debt. Unlike other creditors, however, the IRS can force a garnishment without endorsement from the courts.

In many states, you’re qualified to claim 25% of a person’s net wages to fulfill your debt. However, If the debtor earns low wages, you’ll subsequently recover proportionally less money. Moreover, wage garnishments are not permitted in a few states such as Texas and Florida. Your commercial collection attorney can provide you with this information.

Recording a genuine property lien

Another advanced debt recovery technique is to file a lien on the debtor’s property which they possess. In certain states, your commercial collection attorney can file a lien by recording the judgment in the area where the property is located. At that point the title of the property will be seized by your lien. In order to clear their title of the lien, the debtor must satisfy the lien. Bear in mind that a portion of the debtor’s home property may be absolved from collection.

Other property

A Keeper of the Till, effected by a sheriff, marshal, or constable’s office, can recover monies directly from a business via their account receivables. See our article Debt Collection Tactics Used by Professional Debt Collectors.

Assets of the debtor company, such as furniture and vehicles can also be seized in order to fulfill a debt. Essentially, the main individual properties (rather than land) worth pursuing are assets of value that are worth more than the state’s exception sum. You can attach property or land if it has enough value to satisfy the home loan and pay off any estate exceptions.

The Stevens-Lloyd Group’s network of expert debt collection attorneys can determine exactly which assets are accessible or forbidden when collecting a debt. As part of their asset and liability investigation process, our collection attorneys determine how much a judgment account holder can attach by researching the state’s exemption laws where the debtor is located.

Renewing the Judgment

A money judgment is normally good for five to seven years depending on state laws. If you require an extension, a judgment may be renewed before it terminates. You’ll have to record the new judgment in accordance with the debtor’s state laws to effectuate lien rights.

By utilizing these advanced debt collection techniques, you will greatly increase the odds that your money will be recovered sooner and at less cost to you. As experts in our field, be sure to contact the specialized agents at The Stevens-Lloyd Group when it comes time to use these advanced techniques and recover your money.

Advanced Debt Collection Techniques

Are you uncertain as to whether your debtor will pay your unpaid debt? Or did you run out of ways to effect debt recovery? It’s an extremely cumbersome task to recover past due receivables. At the Stevens-Lloyd Group we utilize a unique blend which incorporates phone calls, strong written communication skills and litigation.

Are you uncertain as to whether your debtor will pay your unpaid debt? Or did you run out of ways to effect debt recovery? It’s an extremely cumbersome task to recover past due receivables. At the Stevens-Lloyd Group we utilize a unique blend which incorporates phone calls, strong written communication skills and litigation. When traditional collection methods fail, we and our debt collection attorneys deploy advanced collection techniques. Below are some of the methods we utilize to collect outstanding monies. These debt recovery techniques will help you recover your money immediately.

Making Phone Calls

Ask for payment in full. If the debtor refuses to pay the entire debt, determine what the problem is. The debtor’s priorities may be other creditors to be paid or their cash flow may be poor. Make sure your outstanding receivables are his or her priority.
While making calls keep the following things in mind:

  • Call the debtor at the right time of day. Monitor their working routine.
  • While on the call document the conversation. Don’t forget the important points verbalized by the debtor.
  • Don’t leave messages
  • Communicate to the debtor company clearly and concisely. Don’t be vague.

Written Communication

Strong written communication when it pertains to debt collection is essential. Deploy invoices and firm and professionally written demand letters when asking for immediate payment. The goal is to get the debtor’s attention and to avoid any misunderstandings. You want to be paid-in-full promptly. Make it clear to the debtor company as to when the bill needs to be paid, any interest or finance charges applicable, and in some cases the consequences for not paying.

Litigation

If all else fails, taking strong legal action against the debtor in case of non-payment may be the best course of action. We recommend that litigation be taken only if your unpaid bill is uncontested. If the debtor company vehemently contests the bill, it can be a no-win situation. Subsequently this process will involve the presentation of legal documents and court summoning of both parties. Even though legal action is initiated, negotiation and resolution are still possible which in many cases is the best path towards debt recovery.

The Stevens-Lloyd Group utilizes a worldwide network of expert debt collection attorneys who work closely with our firm to recover more than 75% of the bad debt which comes across our desk. Read our e-book 2018 List of Collection Attorneys, https://www.stevenslloydgroup.com/wordpress/

Pre-Judgment Writ of Attachment

A Pre-judgment writ of attachments can be effective in certain debt recovery situations. This is where one of our expert debt collections attorneys’ files this action and effectively freezes all the debtor’s assets once the lawsuit is filed. Pre-judgment writs of attachments would apply to undisputed commercial cases of at least $50,000.00 to $100,000.00. The plaintiff usually would file a surety bond which states that one party will pay if that party loses the case. The plaintiff would post a bond of $200.00 to $500.00 and the risk is if they lose at trial the other side can file for damages.

The Pre-Judgment Writ of Attachment is effectuated after the lawsuit has been filed. The advantage of this advanced debt collection technique is that the normal legal process may be prolonged for several years which would allow the debtor to liquidate all his assets or no assets are left to pay off the creditors. The Pre-Judgment Writ of Attachment prevents this from happening.

Suspending Contractor Licenses

If a contractor is unable or unwilling to pay the creditor, one of our skilled debt collection attorneys can file a Suspension of Contractor License action with the state the debtor company operates in. This allows our client the authority to suspend the debtor’s license until the unpaid debt is resolved. This gives our clients the upper hand in collecting the debt. For instance, in the state of California, If the contractor fails to resolve their debt with the creditor a judgment can become permanent with the Contractor’s State Licensing Board. In such cases, all the contractors’ licenses will be suspended including new company licenses.

Filing Involuntary Bankruptcy Petition

Without the consent of the company, several creditors have the authority to force the debtor company into an involuntary bankruptcy Chapter 7. This can only be done under a given set of circumstances that has to be met. The requirements of the involuntary bankruptcy petition are as follows:

  • There must be a required number of creditors
  •  The debtor company is not paying their debts
  •  A specific chapter must be allocated

Filing for Involuntary Bankruptcy can be an effective means for recovering debt especially if large sums of money are involved.
The usual debt recovery protocol of telephone calls, written demands and aggressive legal action is effective more than 95% of the time. But on occasion, creativity and advanced knowledge of the legal system allows the savvy creditor, debt collector or debt collection attorney more avenues and options to recover monies otherwise left on the table. When that time comes, trust the Stevens-Lloyd Group to help you collect.

Debt Collection Tactics Used by Professional Debt Collectors

If you currently have a debtor that is making excuses for non-payment or outright refusing to pay, then you might want to consider soliciting the services of a professional debt collection agency. In the past few years, there has been a rise in the number of debtors who refusing to pay monies owed.

If you currently have a debtor that is making excuses for non-payment or outright refusing to pay, then you might want to consider soliciting the services of a professional debt collection agency. In the past few years, there has been a rise in the number of debtors who refusing to pay monies owed. Due to this, debt collection agencies are quickly evolving. Such agencies are serving a major role in collecting debt from the defaulters.

A debt collection agency can use different tactics and strategies in order to collect the payment from the debtors. Advanced business debt collection strategies and tools used by agencies place a different type of pressure on debtors to incentivize paying the outstanding debt. One of the most creative tactics the Stevens Lloyd Group employed was grounding an asset of a debtor in the United States until payment was made resulting in the collection of $146,588.32. Here is an excerpt from our Air Philippines case study :

“Through our investigation, we come to know that it owned an aircraft which was outright on the ground in Los Angeles, CA. The Martin Goldman firm based out of southern California was retained by the Stevens-Lloyd Group. A lien against the Air Philippines was placed by Mr. Goldman. He seized the plane which was halted on the ground at LAX. Leaving no choice to Air Philippines, it had to pay our attorneys $146,588.32 to free the aircraft. Through the use of advanced debt recovery practices and their experience in the Aviation Industry, The Stevens-Lloyd Group recovered the whole amount which the debtor owed to GM Air $146,588.32. Their team achieved this within four months of intense collection activity.”

Debt Collectors Strategies:

 

Collection Agency Communication

A debt collection agency will first contact the debtors anytime. They may also send emails to them. If the debtors are not responding to emails or calls then they find another solution. To track them down, they may contact their neighbors, friends or relatives in order to contact them.

Debt Service Legal Action

If communication does not work or debtors are responding, then professional debt service providers will take legal action against them to collect the debt. They can send liens, garnishments, and lawsuits after getting a court order against the debt defaulters. Garnishment is a legal procedure in which the creditor can freeze the bank accounts of the debtors. Debt collection agency can also take a lien against the property of the debtor.

Debt Collection Expiration

Debt collection does not have any time frame rather it can be collected anytime as long as the debt collection agencies attempt to collect. If the time given to debtors to pay their debt is over, then a collection agency can take legal action. Debt collectors can also report negative information on the credit report of debtors which may affect their credit scores.

In this hectic life, debtors create a lot of financial stress on a business. If you have failed at all your debt recovery attempts and are out of debt recovery solutions, consider hiring need a professional. The Stevens-Lloyd Group is known for our advanced debt collection techniques, we have very strong relationships with collection attorneys and are able to handle any size of outstanding debt. We take the stress out of debt collection!

Disappearing Debtors: Improving Your Chances of Successful Debt Collection

Few people are knowledgeable when it comes to collecting money and commercial debt recovery agencies. Debts have mounted throughout world economies and the need for collection agencies have risen. Business to business debt collection is often most successful when a professional collection agency is involved.

Few people are knowledgeable when it comes to collecting money and commercial debt recovery agencies. Debts have mounted throughout world economies and the need for collection agencies have risen. Business to business debt collection is often most successful when a professional collection agency is involved. Collection agencies are like dentists in the sense that you hope you never need one but if you do you want the best. There are thousands of collection agencies in the United States to choose from. The Stevens-Lloyd Group has over 60 years of combined experience in the commercial debt collection arena. As a commercial debt recovery firm, we understand the urgency of recovering outstanding accounts receivables.

But imagine dealing with a debtor who suddenly disappears by changing their address and contact information without notifying you. It might at that point seem like you have lost your money, but you must bear in mind that it is unlikely that anyone would be able to simply vanish off the earth’s surface.

When placing business with a corporate debt recovery firm, to ensure the highest possible rate of success at locating debtor companies, be sure to provide as much information as possible. The more knowledge the commercial collections agency obtains from their clients the greater the chances of successful debt recovery.

This material must include names of owners, officers or directors and spouses. Moreover, business and personal addresses, telephone numbers and email addresses are critical pieces of information. By providing this information and maintaining communication with the commercial collection agency, the process will be less frustrating and more effective.

Prior to placing the account with the commercial collection agency, we recommend that the creditor mail a firm ten-day demand letter to the debtor which incorporates a deadline of payment in full. This enables them to understand how long they have left to pay the debt before the file is placed with an outside debt collector. If the debtor company does not respond or effect payment in full after a few letters, making phone calls and demands for payment need to take place. However, if the debtor avoids communication or disappears, it is time to deploy a professional debt recovery firm.

Furthermore, when you employ the services of a business collection agency, make sure you utilize a firm who will not harass and intimidate your customers and operates in an honest and ethical fashion. If the debtor cannot be located, another option the collection agency may have is to retain private investigators who can conduct a skip tracing investigation and locate the new address and contact information of the debtor company. This could prove to be most effective in ultimately recovering your money. And working with a commercial collection with experience dealing with a multitude of different industries, debt can be successfully collected from anyone, anywhere.

How hard is it for UK Businesses to collect debts in the USA?

The United States is a global leader when it comes to business transactions. However, the trade gap between international countries and the United States has been bridged. Due to the increased level of import-export trade between the U.S. and other countries, it will not be uncommon for debts to be accrued.

The United States is a global leader when it comes to business transactions. However, the trade gap between international countries and the United States has been bridged. Due to the increased level of import-export trade between the U.S. and other countries, it will not be uncommon for debts to be accrued. America currently imports 2.2 billion goods which are 1.6 billion more than it exports. Among all the nations the U.S. trades with, the United Kingdom has one of the lowest import/export ratios of indebtedness.

Due to the skyrocketing ratio of import/export trade worldwide, it is imperative for creditors in the U.K. and worldwide to obtain information pertaining to debt recovery in the United States.

The roles played by Credit Bureaus and collection agencies

The Stevens-Lloyd Group, who specializes in domestic and international debt recovery, understands that there is a wealth of credit information in the United States, more so than in other countries. Credit reporting agencies utilize sophisticated computer databases which can decipher the credit risk of numerous business owners who have established credit. The information provided by the databases helps to determine if there is a need to initiate the collection process or start litigation.

In the U.S, there is a wide range of debt collection agencies. Some of these debt collection agencies have branches throughout the country. Due to the nature of their business, debt collection agencies are regulated by federal and state law. For foreign creditors, collecting debts in the United States can be daunting. Moreover, the legal system in America can favor the debtors in certain situations. This is because of perceived harassment by creditors and debt recovery firms during the collection process.

When collection agencies are unable to effect collections on a voluntary basis from the debtors, they may recommend that legal action take place. The case will be referred to a licensed debt collection attorney who can handle it in the state where the debtor company resides. When a case is referred to an attorney by a collection agency, the collection agency and the attorney will work on a contingency basis. The creditor needs to know that they are responsible for paying the court costs associated with the state or jurisdiction which the debtor company is located in.

Debt Recovery in the United States
Collecting debts from the USA is not an impossible task. The presence of collection agencies has helped alleviate the burden associated with recovering outstanding debts.

When a creditor from the UK contacts a collection agency about collecting their debt, the collection agency will make a demand on the debtor and insist that any balance owed is cleared immediately. At the Stevens-Lloyd group, 30 days is all we allow before the legal process is initiated. We will effectuate an asset and liability investigation on the debtor company. Assets of the company, corporate status, number of staff employed, how large the business is and how long it has been in operations are some of the areas covered. This information will be utilized to strategize how the outstanding balance can be resolved either voluntarily or involuntarily.

What happens if the company vanishes?

It so happens that sometimes, debtors abandon ship and disappear. They either choose to close shop or change location. They even go the extra mile by changing aliases. Collection agencies embark on extensive research by contacting neighboring businesses as well as friends and relatives of the owners. Sometimes addresses and telephone numbers can be obtained by this procedure as well as deploying skip-tracing software.

Payment plans and settlement agreements

If the debtors have been contacted and the collection agent determines that payment in full cannot be achieved, a payment arrangement may be arranged. Or if there is a dispute and a need for the creditor to accept a lesser amount than the outstanding debt, a settlement agreement can be reached.

If legal action is necessary, the collection agency will work with their attorneys and commence legal action. If the attorney firm is unable to pressure the debtor to pay their outstanding balance, the attorney will utilize legal force to recover what is owed. This involves procuring a Judgment and garnishing bank accounts and receivables.

What should the creditor take into consideration regarding filing legal action?
To determine if it is worth filing a lawsuit to recover your debt, here are some points to consider.

  • Is the claim large enough to sue?
  • Is the business still operating?
  • Where can the Service of Process be made?
  • Does the debtor have enough assets to pay the debt?
  • Do you have enough documentation to back up the claim in case of a dispute?

Is there a likelihood of the debtor filing a countersuit?

Conclusively, if all the due processes are taken into consideration, it will be entirely possible for UK businesses to collect debts in the US. If you are searching for an expert debt recovery firm to assist you with your business debt collection issues, we suggest you reach out to The Stevens-Lloyd Group. We will answer any questions and assist you with your situation.

Debt Collection Strategies to Collect Debt from Stubborn Clients

As a creditor, it is your right to get your money back which you have given to clients. You have the power to shut down their business if they fail or ignore to pay you. However, in case, your all efforts to collect the debt get unsuccessful, you can take the advantage of debt collection services.

As a creditor, it is your right to get your money back which you have given to clients. You have the power to shut down their business if they fail or ignore to pay you. However, in case, your all efforts to collect the debt get unsuccessful, you can take the advantage of debt collection services. There are many ways to recover debts from clients who refuse to pay.

Whether it’s a new client or an old one, you have the right and obligation to collect the amount you are owed. In case, all your attempts have failed to recover a debt, these are some business debt collection strategies may help you to recuperate your cash.

Keep Calm
Staying calm is necessary when it comes to debt recovery. Of course, if clients do not pay you or refuse to pay the money, it is natural that you may get infuriated. However, it is better to keep calm. Getting angry and using abusive language against them is not the right solution. The angrier you get on them, the less likely you recover your debt. Your wrath will be felt by the clients. They will take it personally and keep grudges against you which make them non-cooperating.

Your mental state affects the way you handle the debtors and the way they respond to you. For instance, if you are calling debt defaulters for the first time to remind them for debt recovery, put a smile on your face and talks to him politely. In case, your mood is not good, take a few minutes to calm down yourself before talking to them. Depending on your tone, they will respond accordingly. The more polite to talk to them, you are like to get a more positive response from them.

Know About Your Rights

If you do not have any experience of business debt collection then you are possibly searching your way through the procedure of payments collection. So, it is required for you to know your legal rights. Once you understand the legal actions which you can or cannot take, you will become more confident while interacting with your clients. For instance, you can take a legal step to know about the social security number of someone in order to move things along.

Keep Everything in Records

In every small or large business, it is important to keep everything documented. When you have all documentation with you, it will help you to fight a legal battle in the court against the debt defaulters. Even if you talk to clients over the phone regarding anything related to debt. Record the call or take notes. In case, if you send debt related emails to clients then copy or certify every letter and save the emails. Keep the record of visits you make to the clients home or office.

Do not Harass

Many people think that harassing people to recover the debt is one of the best debt recovery solutions. However, they are wrong. Harassing includes screaming or abusing clients and calling them every day. It will make your reputation bad in the market. Instead of doing all these things, your persistence is more important. Calling your clients every 7-10 days and providing them with various options to pay your money makes a better sense to recover the debt from them.

Hire a Debt Collection Agency

There are some stubborn clients who ignore to pay your amount. In case, you have a lot of debt amount to recover and are unable to recover the amount, then hiring a debt collection agency will worth your time. Doing this will save your time and also provide you with better results. Professional debt collectors also help to keep you out of legal trouble.
Debt recovery is not a fun. Sometimes, you will feel like you are too harsh towards your clients or other times you will feel like that you are being pushed over. Following the above-mentioned tips will help you to have some success when it comes to collect the debt.

In-House Debt Collections, TM Building

With billions and billions of dollars in debt worldwide, both creditors and collection agencies are feeling the pressure. Debt collectors looking to recover outstanding receivables must employ techniques that will encourage debtors to pay.

  • Overview With billions and billions of dollars in debt worldwide, both creditors and collection agencies are feeling the pressure. Debt collectors looking to recover outstanding receivables must employ techniques that will encourage debtors to pay. Successful debt collection and outstanding receivables collection techniques will help the collector get the account settled immediately, while still being mindful of the laws that protect debtors.
  • Background TM Building Damage Restoration, a licensed general contractor located in Tucson, Arizona for over 30 years. The company has a part owner with a dynamic and energetic person who serves in two capacities; Marketing Director and In-House Collections Manager. She faces many challenges and frustrations as an in-house-collector. She frequently encounters many excuses from client’s delinquent in paying their invoices. Excuses include, “I never received a bill”, “My invoice was incorrect”, or “TM Building Damage Restoration [allegedly] didn’t do all of the work”. She feels that approximately one-third of her cases were downright fraudulent.
  • Solution In 2012, TM Building enlisted the assistance of The Stevens-Lloyd Group, Inc. to help tackle their commercial debt recovery problem. The Stevens-Lloyd Group helped create and implement a program which proved successful in recovering nearly all of TM Building Damage Restoration’s outstanding receivables! Some of the tactics used in helping collect the commercial debt included:
    • utilizing an extensive phone log to keep detailed call records
    • conduct research on her customers utilizing TM Building’s database
    • calling weekly on all accounts 30 days past completion
    • focused mainly on receivables between the $7,000 to $9,000 range
    • asks for payment in full
  • We were happy to assist our client in crafting an in-house debt collection process. That is just one of the services we offer at Stevens-Lloyd Group. For more information on other techniques please read https://www.stevenslloydgroup.com/wordpress/debt-recovery/collection-agency-credit-managemet-recover-outstanding-receivables/ The key to our success was perseverance and know-how from our collectors and attorneys in Florida and California. As a result, the Stevens-Lloyd Group was able to effect payment in full for GM Air on an account which would’ve been written off by our client or a less effective commercial debt recovery firm.
  • Recommendation
    Team up with a world-class commercial debt collection agency to help recover unpaid debts and institute an effective debt recovery system. In our experience, successfully collecting on past due accounts has a lot to do with the expertise of the collector. The more seasoned the collectors, the better the results. For companies without internal collection expertise we recommend turning accounts over sooner, 60 – 90 days. For larger corporate companies with experienced collection teams, we recommend turning over past due accounts at 120 days. If you have accounts that are over 180 days past due, we recommend IMMEDIATELY turning them over to a collection professional. Remember, the likelihood of collecting drops to 50% Between 6 – 9 months past due.

 

Credit Management Services: 5 Additional Tips for Guaranteeing Recovery of Your Accounts Receivables

In our first installment of our Credit Management Services series, we discussed the importance of deploying successful debt collection techniques in order to help the creditor immediately settle their outstanding accounts receivables. In that article, we introduced you to Joy Paul, an in-house Collection Manger for TM Building Damage Restoration, the issues…

In our first installment of our Credit Management Services series, we discussed the importance of deploying successful debt collection techniques in order to help the creditor immediately settle their outstanding accounts receivables. In that article, we introduced you to Joy Paul, an in-house Collection Manager for TM Building Damage Restoration, the issues she faced when attempting to collect, and 7 of her Tips for Success to Guarantee Recovery 100% of Your Outstanding Receivables.

If you have not had a chance to read that previous article you can do so by CLICK HERE.

In Today’s post we are continuing on with Joy’s Tips for collection of Your Accounts Receivables.
Tip #8 – Make Copies Of All Checks Received

Joy posts all checks she receives utilizing QuickBooks. This goes along with what we’ve discussed earlier
– documenting everything!

Tip #9 – Attend A Collection Law Seminar.

Joy attended a collection law seminar. The course taught her, among other things, the need for a punch list (discrepancies) such as having to amend the roof, warranties, etc.

The course also studied and examined the Federal Fair Debt Practice Act (FFDPA). The FFDPA applies to all persons attempting to collect a debt. For example, there are things you can’t say and times you can’t call, for instance before 8 a.m. or after 9 p.m. You must disclose the nature of your call. The FFDCPA regulates all activities. For a complete synopsis of the FFDCPA, see
https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-debt-collection-practices-act-text

It is important to ascertain whether your claim is commercial or individual. Mostly, FDCPA laws don’t apply when collecting against businesses that owe money. For example, it is okay to email and send faxes if the claim is for a commercial debt.

Even though the FDCPA is designed for the consumer, you do want to comply with the FDCPA within reason. Common sense facets to consider are not to make false threats of lawsuits, don’t harass the debtor, and keep conversation clean and professional. The latter is much more effective than yelling and screaming, which are completely ineffective!

Use finesse and tact. For instance, state that “I know that your company wants to do the right thing” or “We are not set up as a bank or lending institution.”

Tip #10 – Demand Letters


(Click on the image for a larger view)

Accounts Receivables | Debt Collection Demand LetterFor problem accounts, Joy deploys six invoices or demand letters asking for immediate payment. Your goals are to get the debtor’s attention, avoid being ignored, avoid any misunderstandings, and to get paid-in-full promptly. Make it clear when the bill is to be paid, how much, any discounts or penalties applicable, and in some cases, the consequences for not paying. Below is format Joy utilizes in her “Final Demand Letter”.

Joy utilizes a 10-day Demand Letter. This would be the 6th letter or invoice. Allow debtor 10 business days to pay. An account over 90 days is considered past-due.

See example to the right:

Tip #11 – Work Authorizations/Written Agreements


(Click on the image for a larger view)

Accounts Receivables | Work Authorization FormThrough the use of a work authorization form or proposal, Joy is able to recover collection fees, attorney’s fees and interest should legal action be deemed necessary. The work authorization form serves as a contract and detailed verbiage is stated at the bottom of the form.

In your business, if there are predictable reasons why debtors think they don’t need to pay, acknowledge those reasons. If you don͛t persist and you won’t be paid. For example, Joy in her work authorization form states that if the insurance company doesn’t pay it’s the responsibility of the customer to pay.

See example to the right:

As you can see, all of the terms and conditions are spelled out on the contract, including the fact that if the insurance doesn’t pay, the company will be responsible to pay TM Building. The proposal is in case of an out of pocket cost or upgrade.

Tip #12 – Personal Guarantees

It is a good idea to obtain personal guarantees and credit applications. If a company is sold or goes out of business, the personal guarantor can be contacted at home and a demand can be made against him personally.

On corporate debts, if the guarantor signs the PG as John Smith, President; this voids the effect of the PG. In this case, he would be signing it only as an agent of the corporation. The same principle applies for signers of NSF checks.

If a company is sold, the new owners will be responsible if the product was purchased after the sale date. Prior to the sale date, the old owners are liable.

If a company changes names, procure a new credit application and personal guarantee. If this hasn’t been done, it is possible that a claim can be made against the successor company. The sale can be considered as a constructive merger if a pattern of continuity can be established. Examples would be same management, same employees and the same shareholders.

Disputes

Joy discovered that in many cases, the debtor manufactures a dispute because they don’t want to pay. Through experience, she is skillfully able to get the debtor to admit how much they owe net of credit, the amount not in dispute. Never let the debtor off the hook without that information.

An example would be a $3,500 claim, debtor disputes $500 and $3,000 is admitted. An appropriate question: “When can I count on your check of $3,000, Mr. Jones?” Force-feed the debtor. Close the deal and confirm in writing