If you are a credit organization or have loaned out some money to a person or group of people, you will eventually want the money back. However, you might come across clients or customers who are not readily willing to pay back the debt most of the time. This can cause your business to go down and probably close if the right actions are not taken.
You have probably come across articles where both large and small organizations have closed down due to credit facilities that were not repaid. In most cases, apart from weighing your organization down, overdue accounts could also prevent you from accomplishing important organizational objectives. Additionally, you might find it hard to collect some of the debts owed to you due to various factors and the debtors’ state. Types of bills sent to debt collectors by creditors include:
• Student loans
• Medical debts
• Credit card debts
• Utility bills
• Car loans
• Personal loans
Understanding how the collection process works is critical for your organization and could be that one straw that helps your organization to stave off failure.
The Collection Process
Usually, the collection process kicks off with collectors contacting the debtor. This is essentially done via mail, a direct call to the debtor’s phone number, or both. Typically, this step is crucial for debtor identity verification. In addition to the identity verification, our attorneys will also seek to persuade the debtor to pay the particular bill overdue. Normally, this is done amicably and takes a very short time. In essence, the collection firm has a high preference for collection without conflict since it tends to increase the amount collected. On the other hand, conflict and struggle require aggressive efforts to add a dent to the amount collected.
Once the firm has contacted the debtor, the collection lawyer sends a validation letter within the first five days. This is according to collection policies such as the Fair Debt Collection Practice Act that require third-party collection agencies not to be abusive, unfair, or deceptive during the collection process. In essence, the collector cannot engage in dishonest behavior or other uncalled-for conduct during the collection of the outstanding bill. If they do so, several damages might get collected against them in terms of finances.
Once the validation letter is sent to the debtor, the debtor has 30 days to raise disputes regarding the stated overdue amount. Some of the information that the validation letter contains include:
• The amount owed to the creditor in exact figures
• Statement of information from the creditor
• A statement that informs the debtor that the bill is valid if they don’t dispute it in 30 days
• A statement that informs the debtor of their right to request further information and that the collector will provide the information if requested.
• Name and other relevant particulars of the creditor
Validation and Debt Verification
Normally, the debtor may want to verify the outstanding bills. If they do, all the collection activities initiated will halt. This is critical in ensuring that the bills are well verified and that the debtor understands what they owe. Immediately after the bills are confirmed, the collector is allowed to resume the collection process. In most cases, verification and validation are followed by request to report a delinquent account to the credit authorities. Normally, the debtor can only report the account during a particular time frame.
Normally, the law firm will call the debtor until the payment is made to ensure that the bill is paid. In Massachusetts, for instance, the statute of limitations for collection is six years despite the type of agreement – oral, written contracts, or credit cards – the debtor had with the creditor. The nationwide collection is therefore dependent on the different statutes that govern each state’s collection. Some states even have time limitations of up to 15 years. Now, if all the amounts overdue remain unaccounted for, the party issuing the credit may initiate legal action against the particular debtor.
Taking Legal Action in Time
Though the statute of limitation in Massachusetts is set at six years, you can opt to file for legal action if the outstanding amount is between 120 and 180 days old. Your lawyer will advise you in regards to when is the right time to pursue legal action. Essentially, this period requires caution, and your collectors might not have other options for collecting the bills. Though the creditor might take legal action, the debtor is still given continuous opportunities to pay the bill. Normally, during the legal process, the collector does not have the mandate to get funds from the debtor’s account or paycheck until the lawsuit is confirmed valid.
In most cases, collectors try to ensure that the collection does not go the legal action way. This is because they will want to collect more and cut down on the collection costs. In addition, the cost of legal action might take most of the profits that the collector could have earned.
Though the judgment might confirm the validity of a lawsuit and allow the collector to collect, the debtor might be holding nothing in their bank accounts. Therefore, the following actions are initiated for the recovery.
• The forced sale of particular assets
• Consumer property lien
• Vehicle or bank account levies
• Wages garnishment
The most common action is wage garnishment since it ensures that both the creditor and the debtor remain on good terms and allows for better resolution.
Collection requires an aggressive company that ensures your money is returned. In Boston, you can choose a Massachusetts collection attorney to ensure the successful retrieval of your funds. This process will only cost you a small contingency fee depending on the bill that is being collected. For further information, reach us at our law firm, and our experts will be there to help you.
First, dealing with a collection agency can be time-consuming. You have to take care of all the phone calls, letters, and more. This can really wear you down and cause you to feel overwhelmed. When you have an attorney, this will be much less of a problem because they know how to handle the communication between you and the creditor.
Second, dealing with a collection agency can be dangerous. If they intimidate you or lie to you, it could put you in harm’s way. You do not want to get into any situation where you are unable to protect yourself. An attorney can help you protect yourself from anyone who might try to harm you. Plus, if you have to go to court, your attorney would know how to fight these companies in court and get you the money you deserve.
Third, dealing with a collection agency can cost you a lot of money. Often, when you are dealing with a large amount of debt, you will pay a lot in attorney fees. If you have too much, this could endanger going bankrupt or losing everything. Getting an attorney can prevent this from happening.
Fourth, you are not always going to get what you are entitled to. Sometimes, creditors will work with collection agencies because they want to collect on debts that are past due. This is legal, but this can be a Catch-22 situation. If the collection is past due, the creditor has no obligation to pay it. However, if the collection is not paid on time, they are legally obligated to do so.
If you need help, there are options available. Our debt collection attorney’s in Massachusetts have people waiting and standing by who can help. Call a professional today to discuss your options.
Fifth, you may not feel comfortable dealing with a collection agency. Again, dealing with a group of people that you don’t know anything about could make you uncomfortable. If you aren’t very comfortable with collection agents, then you need to have an attorney.
Sixth, you might not have the financial means to hire an attorney. The government sets limits on how much money you are allowed to spend on legal fees. If you are unable to come up with the money needed to hire an attorney, you will probably not be able to overcome your problems on your own. Make sure you take all of these factors into consideration before you make any final decisions. Getting an attorney for dealing with debt can make the difference between success and failure.
Finally, you might not be aware of the laws that apply in your state or federal country. However, these laws may have a significant impact on your ability to successfully dealing with collections. If you aren’t familiar with these laws, you will want to consider getting a law firm to deal with them.
Even if you hire an attorney, you will have to face the collection agencies you are dealing with. They will continue to call you, send you letters, threaten you with things like foreclosures or repossessions. You will have to respond to these calls and letters, so that you will need an attorney.
Debt is one of the most difficult things that a family can go through. You must work hard to set up a plan to handle this situation. If you don’t have a plan, you will end up dealing with more problems than you originally thought you would. For this reason, it’s essential to hire an attorney when you’re dealing with debt. This will ensure that you get everything settled and handled to move forward with your life.
If you think you don’t owe money to anyone but your credit card company, then it is worth asking a lawyer to find out what to do with all that money. There are so many ways that a lawyer can help you. They can negotiate with the credit companies for you. They can also reduce the amount of money you owe by consolidating your money into one payment that you can afford each month. You will also get to keep all of the fees that you would have been paying the credit card companies for several years.
The best way to find out what to ask a lawyer to collect is to gather up as much information as possible on the subject. First, you should look online and search the internet for a law lawyer or a relief lawyer. You should also see if the credit counseling companies offer a free consolidation consultation or a free relief consultation.