What is Debt Collection Agency?
Debt collection is the process of pursuing payments of debts owed by individuals or businesses. An organization that specializes in debt collection is known as a collection agency or debt collector. Debt Collection agencies are a significant tool for both small and large businesses. They help improve and manage your bottom-line, allowing you to concentrate on your company’s growth.
The Process of Debt Collection
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 a 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 the 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 the 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.
The Role of International Recovery Solutions
Debt Collection agencies provide a service to businesses that want to serve some of the following needs:
1. A company is too small to have a collection department of their own.
2. A company lacks the expertise to collect the money themselves.
3. A company wants to protect their company image and outsource their bad receivables.
4. A collection agency will get faster results.
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