Most companies send past-due accounts to a collection agency when they are 90 to 120 days past due. If a debtor pays within the first 10 days, PSI doesn't charge you. Key takeaway: The Fair Debt Collection Practices Act aims to protect consumers from overly aggressive collection tactics. Select a collection agency that is licensed and/or bonded in your state and the states where your customers live. Here is our guide to choosing the right debt collection agency for your business needs. Comparing Collections Agencies and Small Claims Court for Collections, The 5 Best Debt Collection Agencies of 2021, How the New Small Business Bankruptcy Act Helps Business Debtors, A Beginner’s Guide to Business Bankruptcy, How to Take Someone to Small Claims Court, How to Avoid Bankruptcy and Save Your Business From Closing, Using Chapter 11 Business Bankruptcy to Restart Your Business, Want to Sue Someone? That's particularly true with collection agencies. "It might be worth it to go with an agency that's more expensive if they have a better success rate," said Mahesh. Next, determine which agency is handling your debt to ensure their payment. In some cases, you can get paid the same day you contact a small business debt collection agency. Despite the pandemic, debt collection agencies are still chasing down money owed and could rely on the courts more in the coming years. Based on our experience, PSI delivers fast, helpful customer service. It can damage your reputation, which limits your ability to attract new customers. Key takeaway: The benefits of hiring a collection agency are that you don't have to chase down clients, nor do you have to worry about being sued if you're collection tactics are too aggressive. If the debtor has an attorney, the collection agency has to contact their legal counsel, not the debtor. A collection agency takes the pressure off you to awkwardly confront customers about money they owe you. Hiring a debt collection agency has four benefits: However, there are three drawbacks to using a collection agency: Small business owners usually seek help from collection agencies when it's 90 to 120 days late. It provides commercial collection services throughout the U.S., Mexico and Canada. The company states it has over 50 years of experience collecting past-due accounts. It can track down debt nationally and internationally and is accredited with the Better Business Bureau. http://mhg.bz/Â, National Service Bureau â National Service Bureau helps with both B2B and B2C collections. Stage Two Contingency Collections is designated for accounts that are more than 120 days late. Fixed fees aren't very common. But if you use a debt collection agency that is well versed in federal and state laws, you won't worry whether you've run afoul of any regulations. How a Consent Decree Works and When It's Used, The Balance Small Business is part of the, Collecting on a small claims court judgment, Disregard a written request to cease contact, Ask how the agency tracks and finds debtors, Ask them to show you a typical script they use, Check the reviews on Google for local agencies, If you are still unsure, you might try contacting your. It offers an array of services, including skip tracing and credit bureau reporting. Here are ways that collection agencies are using technology to locate debtors and recoup money owed: Key takeaway: Collection agencies use technology to recover money for their clients, whether it's skip tracing to find hard-to-reach debtors or artificial intelligence to tailor strategies to individual clients. Founded in 1991, The Kaplan Group is a top commercial debt collection agency that only works on B2B collection. We also conducted our own research into the industry. 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