Legal Debt Collection Tricks

If a customer owes your local business money, it's hard not to
feel angry, like you want to do anything possible to get your
money back. But the days of going all out to collect on a debt
over.

The Fair Debt Collection Practices Act, designed to protect
consumers from harassment or intimidation, sets firm limits on
what you can do to collect a debt from a consumer. The federal
debt collections law even prohibits practices that were once
standard, and that you might not consider harassment at all.

Besides, as a local business, you have an even more powerful
reason to be especially careful about legal debt collection
issues. You have something much more valuable at stake than a
lawsuit: your business's reputation in the community.

Legal Debt Collection Best Practices:

There are plenty of articles on the web that lay out in plain
English what the Fair Debt Collections Practices Act says you
can and cannot do. Just to give you some idea of the law's
requirements, here are some of the biggest:

- No telling any third party about the debt (except collection
bureaus, collection agencies, or the debtor's attorney).

- No calling on the telephone 9 pm - 8 am, or calling
repeatedly in a way that is annoying.

- No postcards or envelopes that mention the debt.

- No threats to take actions you cannot or will not really
take, such as seizing property, in the case of an unsecured
debt.

- No misrepresenting yourself (e.g., "Hi! This is the
Publisher's Clearinghouse Sweepstakes. May I speak to John?").

- No paying down the debt with payments the customer has
directed be applied to other debts

Tips and Tricks for Legal Debt Collections:

With all these limits on what you can do to collect a debt,
what can you do legally?

- Speak with the debtor personally on the telephone; most
likely he or she wants to pay but is in over his or her head.
Begin by asking what circumstance has kept him or her from
paying. Offer to set up a repayment plan.

- You should both send letters and make telephone calls. Many
people will only respond to one or the other.

- Document every part of the collections process. Take notes
for each call and keep a copy of each letter. If the debt does
ever go to court, you will have proof you acted legally.

- Look into reporting the debt to credit bureaus. If you can,
and are willing to do it, you can tell the debtor that not
paying will impact his credit rating.

- Best tip of all: hand over the job to a dedicated collection
agency. Small business debt collection services start at as
little as $20 per debt. The fight to get paid is a fight no
business should have to involve itself in.

Unfortunately, debt collections are a part of business. Just
make sure that for your local business debt collection law is
followed to the letter, or legal proceedings may become part of
your business, too.


About The Author: Free debt collection laws information at
http://www.debt-collection-laws.com/