Overdue accounts weigh down even the most impeccably run businesses and without professional assistance, you may never collect on those debts. The most common debts that creditors send to collections include credit card debts, student loans, car loans and medical debts. You may see phone bills, utility bills, car loans and personal loans sent to collections as well. Understanding how the collections process begins can help you to know more about Massachusetts small claims.
Working on a Contingency Fee
Most debt collection companies collect on a contingency fee. This means that they keep a percentage of the amount collected. Older accounts will normally pay higher percentages because of the difficulty in collecting from them. Massachusetts Debt Collection Attorneys work on contingent fees within the collection process.
How the Collection Process Begins
Massachusetts debt collectors will first mail letters and call the number of the debtor. They call the consumer for two reasons—first, they want to confirm their identity. Second, they hope to persuade the consumer to simply pay the outstanding bill. The collections law firm would prefer if they paid it without conflict because it increases the amount recovered, but the struggle often means that they must take further action.
After the initial five days of speaking with the debtor, the collector must send out a validation letter. Based on the Fair Debt Collection Practice Act, third-party collections agencies can’t do abusive, deceptive or unfair practices when collecting. They can’t engage in misleading conduct of any kind when collecting on an outstanding bill, or a number of financial damages may be collected against them.
Once the collections agency sends out a validation letter, the consumer has 30 days to dispute the bill. They may request written evidence of owing on this bill.
Within the letter, you must include:
- Total amount owed
- Statement to provide information from original creditor if requested
- Statement saying that unless the consumer disputes the bill in 30 days, they see it as valid
- Statement saying the collector will provide further information if requested
- Name of the creditor
During the Validation Letter
The consumer may request verification of the outstanding bill, and all collection activities must cease during this time. Once the bill gets confirmed, the collector can resume the collections process. They will respectfully inform the debtor about the time frame that they have for reporting a delinquent account to the credit bureau.
Calls Continue Until Payment Reached
Calls from the collections agency will continue until the lawyer arrives at an agreed-upon point with the debtor. In Massachusetts, the statute of limitations to collect on debts has been set at six years, regardless of it being oral agreements, written contracts or credit card debts. Each state will have a different statute of limitations with some stretching for up to 15 years.
If all debts remain unaccounted for, the creditor may initiate legal action against the debtor.
Take Legal Action: The Right Time
The statute of limitations in Massachusetts for debts remains set at six years, but once an outstanding bill reaches 120 to 180 days overdue, the collector may wisely choose to pursue legal action. At this point, they may have no other choice if they ever want to collect on the bill.
Even throughout the legal process, the debtor receives every opportunity to pay off the outstanding bill. Once the court sees the lawsuit as valid, the court issues a judgment. The collector can’t touch the consumer’s paycheck or bank account until this point. With the judgment, they can recover the payment. The collections agency may try to avoid this, however, because they want to collect as much as possible. Court costs can gobble up the profits, otherwise.
How Does a Judgment Work?
In some cases, the individual may hold nothing in their bank account to collect on. What does a collection agency do in this case? One or more of the following legal actions may take place:
- Garnishment of wages
- Levy on bank account or vehicle
- Lien on consumer property
- Forced to sell an asset
Most commonly, they will issue a wage garnishment against the person who owes money. This action prevents hard feelings with the customer while resolving the issue. When this judgment happens, it doesn’t show the company name that chose to do this. Having a Massachusetts debt collection attorney
to collect on your debts can make a huge difference. Hiring the right Boston company ensures a successful collection.
First, we do our best to establish an effective process for collecting outstanding bills. We try to keep it from getting out of control by simply collecting what the individual owes. If that doesn’t succeed, we initiate the legal process.
If you’d like to learn more, contact our law firm for further assistance. We have the expertise to assist you with collecting on debts. In some cases, a letter given to a customer will be enough to get the bill paid, but we also have cases where you need to take the legal process further. We understand how this works and how to respectfully follow the proper protocol and do as little damage to the business-to-customer relationship as possible. Our professional collectors understand what it takes to get customers to pay what they owe.