Time-Barred Debts: Debts with Expired Statue of Limitations

There are plenty of debts out there which are known as "Time-Barred." To put it simply, a Time-Barred debt is a debt which is too old to be collected through a normal court process. That means the debt's owner doesn't have to worry about legal action being filed against them from their creditors or from collectors hired to acquire their debt. While it's not impossible to collect on a time-barred debt, it is highly unlikely you will be able to do so. After all, without the threat of legal action there's a slim chance of a debtor complying with a collector's wishes. 

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What constitutes a Time-Barred debt, and the length of time needed to pass before a debt's statute of limitations expires, varies from state to state. For some states a debt might become Time-Barred within 3 years of it being owed. For other states the statute of limitations on a debt might not run out for at least a decade. To find out whether a debt is Time-Barred or not you need to learn the law of your state. You can also call the office of your state's Attorney General to find out when a debt becomes, essentially, uncollectable.

These laws not only protect a debtor from legal action, they also protect debtors from overly aggressive collectors looking to acquire payments off of the expired debt. If a debtor has been harassed or aggressively pursued by a debt collector over a Time-Barred debt then that debtor is legally able to sue the collector or the creditor itself. If you are a creditor then you likely don't want to be taken to court over a debt you can't collect on, and you likewise don't want to expose your creditor clients to legal processes due to your behavior. So while Time-Barred debts can technically be paid back, they often aren't worth pursuing.

Little Known Secrets for Collecting Judgments

Most debt collectors don't want to have to bring their debtors to court for the same reason why most debtors don't want to go to court. Going to court to settle a debt is an uncertain affair, it can be very expensive if you have to hire lawyers, and it is almost always a big interruption of your daily working life and routines. Yet there are a few little known secrets for collecting judgments which the most successful debt collectors understand, and which help them make court a worthwhile experience every time.

The first little known secret for collecting judgments is the fact you need to run the math and figure out whether a debt is worth bringing to court in the first place. Take out a piece of paper and draw two columns on it. In the first column write out how much money you have to gain from collecting on the debt which you're considering bringing your debtor to court over. In the next column write out and add up all of the expenses you can expect to incur from going to court. See if the numbers work out in your favor, and then decide whether to go to court or not.

Interestingly enough, the best secret for collecting judgments in court is a very simple, common sense one- you need to make sure you abide by the law throughout the entire process. The number one reason why you'll lose a court case against an individual who owes you a debt is if you break the law at any point in the process of attempting to collect from them. If your debtor can prove that you have harassed them, or if you otherwise violated one of their rights as a debtor, then you will lose your case. Most debt cases are yours to lose, so focus on making sure you abide by the law and your industry's best practices and you should do just fine collecting judgments.

3 Sure Fire Ways to Collect International Debt

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Over the last 3 years, more people than ever before have started to default on their debts or otherwise attempted to skip out on their financial obligations. While plenty of individuals have begun to default on their domestic debt, even more people have defaulted on their international debt. International debt is more difficult to collect due to the fact every nation has their own laws regarding its collection, and a collection agent needs to abide by these laws. That's to say nothing about the added difficulty of tracking down an international debtor.

Despite these difficulties, there are 3 sure-fire ways you can collect international debt.

1. Know the Laws Involved: Not every country have the same legal agreements between each other regarding how you can collect on international debt. For example the United States has a different set of debt collection agreements with many Asian countries than they do with European countries. If you aren't well versed in these laws, or if you don't feel like you'll be able to understand them on your own, then consider working with a lawyer well versed in the relevant laws.

2. Sue the debtor: Filing official legal actions is your best bet when it comes to grabbing an international debtor's attention. International debtors are unlikely to respond to the same light, unofficial pressures as domestic debtors so taking serious, official, and occasionally drastic measures is often necessary. Keep in mind that the actual legal process and proceedings will occur within the court of the country of your debtor.

3. Pawn the debt off: You can also sell the right to collect the debts you're currently chasing to a company better versed in international collections. This is the fastest and easiest method of receiving compensation for the international debts you're presently responsible for.

Settling an international debt isn't impossible, but it is more difficult than collecting domestic debt.

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More FAQs

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Q. HOW SOON CAN YOU COLLECT FOR ME? 

A. Some cases are collected within the first 30 days and others are never collected. In general, most successful collections become apparent soon after our collectors begin dunning the debtor. Other times, the debtor pays immediately after the lawsuit is served, and generally we know if the collection will be easy, even if contested, within the first 120 days. While sometimes it is possible to delay in court for months to years, most collection cases are easy to win and harder to collect than regular court cases. That means that, even in a contested case, we can have a good projection for you rapidly. 

Q. WILL YOU COMPROMISE MY CLAIM? 

A. Only you can approve a compromise! We will do our best to get all of your money and we won't compromise your claim without your consent. If we get any written offer, we will communicate it to you for your decision. If we get any legitimate oral offer, we will also communicate it to you for your decision. Ultimately any settlement or compromise will be your decision. 

Q. DO YOU TAKE PAYMENTS? 

A. We always demand full immediate payment. Very frequently the threat of litigation or the filing of proceedings with the court gets the debtor to pay all of the debt immediately. In some circumstances, payments may be the only way to collect all of your money. If it becomes apparent that a debtor must make payments, or that we can get your money faster with voluntary payments than by waiting to fight in court, we will recommend a structure for the recovery of your money in such a way that you get it or we have the immediate right to seize assets and interrupt income stream. Remember, it will be your decision to accept time payments.

Frequently Asked Collection Questions (Part 1)

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Q. IS YOUR LAW FIRM AND AGENCY BONDED, INSURED AND LICENSED?

A. The law firm is licensed to practice law in the state of GA and TN. We also have collection agency licenses in all states that require attorneys to be licensed as a collection agency. The Law Offices of Ross Gelfand, LLC has a $3,000,000 aggregate errors and omissions policy through Minnesota Lawyers Mutual -Policy #8199-03. We also have a $500,000 fidelity bond and a $1,000,000 business liability policy through Hartford Insurance --policy #20 SBA TQ2184.

Q. WHAT IS YOUR SUCCESS RATE?

A. Our most frequent question is "Will you be able to collect my money?" Everyone wants someone who can say "YES". We believe that if anyone can collect, we can. Because our business is debt collection and we are a national law firm, we collect more money, more often than most other third parties! Furthermore, our state of the art software as well as our highly trained collectors and paralegals make our success ratio higher. Our success rate depends on many things and even before we investigate and attempt your case, we can get a good idea of collection prospects. Certain cases, for example, are highly collectable while others have a low collection percentage.

High probability of collection success is often indicated by:

1. very recent debt; and/or 

2. lavish life style of an individual debtor; and/or 

3. operating businesses; and/or 

4. excellent credit history; and/or 

5. occupational or professional licenses of debtors; and 

6. generally stable history; and/or 

7. supportive family; and/or 8. strong financial statement or substantial asset ownership; and/or 

9. history of reliance on obtaining credit; and/or 

10. debts under $75,000.

A lower probability of collection occurs in cases that are:

1. very old; and/or 

2. against corporations that are out of business; and/or 

3. against outright thieves, like those in jail or who are being chased by law enforcement; and/or 

4. against those who have or will be filing for bankruptcy protection; and/or 

5. against those people whose lifestyle tends to indicate no assets now or in the future, such as alcoholics, drug abusers, chronic gamblers, those chronically on welfare, the terminally ill; and/or 

6. huge debts; and/or 

7. large IRS tax liens.

Debt Collection and Social Media

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No one can dispute that the economy is heavily reliant on the debt collection industry. The economy won’t be in the pink if many businesses won’t hinge on the repayment of credit to pay for facilities, salaries, taxes, and other expenses. That’s why when times get harder, debt collectors become more aggressive in pursuing debtors. These days, creditors and collectors turn to the new means of reaching debtors—through Social Media. 

What really is Social Media?

As Wikipedia puts it, “Social Media refers to the use of web-based and mobile technologies to turn communication into an interactive dialogue.” Social networking sites such as Facebook, Twitter and LinkedIn commonly identify Social Media. However, other forms such as blogs, podcasts, pictures, videos, and social bookmarking also fall under the broad umbrella of Social Media.  

According to a report by Pew Internet & American Life Project, 65% of adult users are into social networking sites. Because of the high penetration rate, the drive of falling back on social media is too intense to ignore. 

But what can debt collectors really do in social media?

There are actually three reasons you may consider before taking the plunge into social media: to locate, communicate, and even accept payments from consumers.  A simple search on these platforms could yield vital information such as the current location and employment details of the debtor. The use of the “Big Three” in social media such as Facebook, Twitter and LinkedIn depends on the type of debt. Facebook appeals more to the younger segment, while LinkedIn is the working class’ hangout.

Downbeat consumers

Not everyone agrees that consumers should be reached through social media. Consumers and consumer protection groups alike are wary about the increasing number of collectors who turn to social media. 

However, nothing can really stop you from using social media in your collection efforts, not even the Fair Debt Collection Practices Act which was passed in 1978. Making false statements and harassment are forbidden though. You cannot just claim to be someone else when connecting to consumers online. Just don’t cross the line.

In line with this, the Federal Trade Commission is soon to release guidelines that will tell you about the dos and don’ts when it comes to the use of social media. On the other hand, The Association of Credit and Collection Professionals has already outlined the blueprint for Modernizing Debt Collection that proposes the removal of barriers to effective communications between consumers and debt collectors. 

More than just collections

Using more tools is essential for the debt collection industry. But more than successfully collecting what businesses rightfully own, social media use can be your own way of making PR work. Quite a few times you would find a bunch of negative tweets on Twitter. Although you don’t really need to engage consumers, responding to one or two of their questions or bad comments can really make a difference. 

Reaching consumers through social media will also make communication more effective. It will allow consumers to know the accurate details about their debts and their options directly and fast. This could even help both parties reach agreements without having to go through tedious and more costly settlements. 

The Ripe Time to Turn Over Collections

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As a creditor it can be difficult to know when it is the right time to turn an account over to collections. Even though your collections efforts may not be coming to fruition, you may have several reasons for not wanting to turn an account over to a collections agent right away. You may not want to spend the extra money on outside collections, or you may simply want to have faith that your clients will eventually pay the debt you are owed. However, at some point you have to face reality and know that a collections agent is required.

But how do you know when the time is ripe to turn over an account to a collections agent? There are several key factors that can help you determine this. First, consider the response you have had from your client. If your client has completely ignored all contact regarding the matter for several months, you need to enlist the aid of a collections agent.

Another thing to consider is how much time your company is spending trying to collect the debt. Time is money. It may be more cost effective in the long run to hire someone to collect the debt for you.

Finally, there are many times during the year that is the best time to turn an account over to collections, because there is a possibility of an influx of money. If your client is a student, there is a good chance that they receive loans and other funds around the end of December and the end of August. These are good times to try to collect on the debt.

Another great time for anyone to collect on a debt is during tax season. People often begin filing their taxes as early as February if they know they will be receiving a refund. Starting the collections process in February and going on strong through May or June will guarantee that you catch your client with their tax refund in hand. At this point, if they do not pay the debt, you know they have no intentions of doing so.

In the end, any time can be the ripe time to turn an account over to a collections agent. It all depends on your resources and your company’s policies on how long a debt can remain unpaid before you take action. Most certainly any debt more than six months old should be sent to a collections agent. These agents can often have the means to collect on a debt that you yourself cannot obtain. 

Small Business Collections - How Collection Efforts can Benefit Small Businesses

There are all types of debt collection claims that can be handled by the office of Ross Gelfand. If you have a small business, sometimes these are the most difficult types of collections to be reimbursed on. With today’s economy, it is harder to collect unpaid balances, but at the office of Ross Gelfand has found a way to make it easier by offering services for commercial, rental, medical, and skip tracing services. What the help of their office they can help small businesses collect the money that is owed to them. They have a team of experts waiting to answer any type of questions that you may have. 

Unfortunately, most small business will one day have a situation with collections. At first, you may not realize how much revenue you may be losing every day. The law office of Ross Gelfand has done a remarkable job recovering some of the lost currency. They offer many different types of services. They can help you handle a vast variety of small business situations and business collections services. They can handle everything from a commercial lease to a contract on the building. Sometimes the most difficult situations may be insurance subrogation but this office will always rise to the occasion, and succeed to help you get the benefits you have deserved. They provide telecommunications and high technology on your behalf to get you the best return possible within your legal rights. 

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By having the ability to collect some revenue on your behalf your small business can start to thrive. Your small business will be likely to succeed even more because you can reinvest your own hard earned money back into your business. There has never been a more dedicated law firm, then Ross Gelfand to help the small company. It may be just a few dollars here and there, but those few dollars add up. With today’s economy, every little bit helps, and before you realize the money that is owed to you the figure could be in the thousands. Ross Gelfand has the experience and the knowledge to help you collect everything that is owed to you. The law offices of Ross Gelfand work within the legal guidelines of several different states. They will do all the necessary paperwork, phone calls, and follow-up on your behalf so that you, as a small business owner, will have one less thing to worry about.

The Pre-Judgment Phase of Debt Collections – How Law Firm’s Efforts Obtain Better Results

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There are numerous steps a small-business owner can utilize in collecting money owed. A small company owner may start out with letters of notification, and follow up with phone calls to the person who owes the debt. A small business owner may get a response from the debtor and they may pay their debt. Unfortunately, sometimes a business owner may need to hire an outstanding law firm such as the Law Office of Ross Gelfand. Putting a law firm to work for you makes perfect sense. It will increase your leverage and show that you mean business in collecting the money owed to you. 

At the Law Office of Ross Gelfand, they understand today’s economy and that everyone is just trying to get by financially. When the small-business owner has no other alternative, they can hire Ross Gelfand to take pursue the uncollected balance. If they have tried everything possible to collect the debt from the individual and nothing has worked, they may seek a pre-judgment phase of the debt collection process. What that means is that a letter is sent out to the one who has not paid their balance on behalf of the business stating the fact that in a certain amount of days, if the balance is not paid, then the Law Office of Ross Gelfand has no other choice but to seek a pre-judgment in an attempt to get the individual which owes the money to pay the balance. If all else fails then there will be a set judgment against the debtor to recover the amount of money that is owed to the company. 

The Law office of Ross Gelfand is outstanding when it comes to the pre-judgment phase of the debt collection process. They understand with today’s financially trying times. At the law office of Ross Gelfand after everything has been tried: the statements, phone calls, and letters, they will move to the judgment phase of debt collection process on the behalf of the small business owner to start the process of garnishing wages. They understand the struggles of the small business owner, and have the unique ability to handle this type of situation in a professional manner. Any small business owner who has an outstanding amount of debt that needs to be collected should take a look at the law office of Ross Gelfand.

Post - Judgment Phase Collections

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At some point, as a small business owner, everyone faces the problem of collection.  You have tried to collect the money yourself, but have been unsuccessful.  You hired the Law Offices of Ross Gelfand, and they did their job.  Very professionally, they made the phone calls, sent the letters out, and actively pursued the pre-judgment phase of debt collection process on your behalf.  If these efforts have been to no avail, what is there left to do next?

At the Law Offices of Ross Gelfand, they know their job is not finished.  Once they have the judgment, even more work will need to be done.   Ross Gelfand understands that even with this piece of paper from the court some people still will not pay you, the small business owner.  If an individual had every intention of trying to make restitution, they would probably have never let it lead to the court system.  They would have made simple payments until the balance was paid in full.  At the law offices of Ross Gelfand, they understand the way some individuals think.

The Law Offices of Ross Gelfand is skilled and knowledgeable, and they know how the debt can be collected after the time of judgment.  They investigate where the one who owes the judgment may be employed.  The name of the bank account being used by the debtor will be discovered.  The Law Offices of Ross Gelfand will take legal action on the behalf of the small-business owner to collect the money that is owed.  They may be able to do this by withdrawing the funds directly from the bank account of the debtor where funds are held.  They may have to garnish the individual’s wages until the balance is paid off.  They will do everything in their power to ensure that you, as a small business owner, will receive the money that is due to you.  They understand that everyone does work hard for a living, and sometimes individuals get themselves into a situation where they cannot pay their debt off. The office of Ross Gelfand is willing to work with individuals and will always do so in a professional manner so as not to embarrass anyone involved.

You need to understand the judgment does not guarantee payment.  A judgment simply grants you the ability to try to get the judgment enforced.  The Law Offices of Ross Gelfand are experts in judgment recovery.

How the FDCPA and TCPA Effect Collections

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The Fair Debt Collections Practices Act, or the FDCPA, and the Telephone Consumer Protection Act, or TCPA, both effect technologically based collections agencies negatively. There are many provisions set forth in these acts that make it difficult for a technology based collection agency to use auto dialers, automated messaging systems, and automatically printed statements or collection notices. These regulations must be followed, yet it is difficult to follow all of them using this technology for collections.

For example, the TCPA mandates that you must provide your name, the name of the entity, and the phone number or address of the entity on any automated messages. This can be detrimental to collections efforts, as people are not likely to return your call if they know who is calling and why.

Another example of how the TCPA negatively affects technology driven collections agencies is that it prohibits automated recordings or artificial voices to call any cellular phone. This is detrimental to technology based collections agencies, because many Americans only carry a cell phone. Home telephone service is becoming a thing of the past. If you cannot contact a cell phone by automated means, you may as well give up on the automated means all together.

The provision about cell phones in the TCPA hurts countless agencies that do not even realize they are calling a cell phone. However, the way the law is written, each offense can cost the agency five hundred to fifteen hundred dollars per occurrence. This is a hefty price to pay for the cost of doing business. No agency can afford it. Therefore, most collections clients cannot be contacted by automated means.

The FDCPA also gives limitations to technology driven collection agencies. For one thing, you cannot contact someone by phone if they request no contact by that means. This cannot happen if you have an automated system, and it can be argued that by not giving someone the opportunity to deny contact you are violating the act.

Another way the FDCPA limits automated collections is by the fact that various statements must be made in every contact. The collections agent must make it clear that the call is from a debt collector, and that any information provided will be used to collect on that debt. Including this type of personal information in an automated call is nearly impossible.

As you can see, there are many reasons why technology driven collections agencies are becoming a thing of the past. Between the TCPA and the FDCPA, there are so many regulations that must be followed that automated systems are nearly obsolete. You may need to consider other means for collecting your debts.

Collection Management and Debt Solution

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Many financial institutions seek the assistance of an experienced debt collection agent to enhance their debt portfolio. The debt collection agencies are specifically hired by lending institutions to acquire the money owed to them. Collection laws are executed by professional law firms that provide companies with the legal securities and protection needed to establish an effective collection campaign.

Any financial organization that endures debt or collection issues has the opportunity to utilize collection attorney affiliates to effectively recover large bills that have gone unpaid. A network of bonded and licensed collection attorneys offer a friendly service that not only recovers your debt, but also improves profitability. Your need to communicate with the debtors can be achieved through the involvement of highly skilled collection law offices within thirty days. Specifically, the debt collectors take pride in utilizing a unique approach that renders a debt solution in a timely and inexpensive manner.

The friendly collection law experts are always available to assist you with your commercial and retail debt collection needs. Licensed and professional debt collection attorneys provide services for well- established corporations to private individuals. The law firm patiently answers your questions, while simultaneously composing a powerful argument to manage your case. More so, the knowledgeable attorneys provide efficient services that accommodate each client’s needs. There is an array of services, which also includes medical and Skip Tracing.

The commercial account receivables include commercial lease accounts, binding contracts, telecommunications, open accounts, high technology, and insurance subrogation. The collection law offices also encompass a retail collectors department that specializes in consumer debt problems. Retail collections may include insurance subrogation, auto deficiency, credit card, and unsecured loans. A law collection management team will work on medical dilemmas, to include self- pay, contract compliance, PPO appeals, silent PPO’s, and HMO reimbursements. The Skip Tracing process is an aggressive and effective strategy used for tracking debtors. In order to successfully collect money owed to you, you must first locate the subject. Despite attempts to relocate or disconnect phones, the Skip Tracking debt solution tool is equipped to locate any debtors across the globe.

Utilizing the services of highly skilled collection attorneys has considerable advantages. A debt collecting law firm proves to be very effective in collecting aged receivables; delivering a high recovery rate. They have the resources necessary to successfully fulfill its client’s needs.

The Law Offices of Ross Gelfand, LLC provides quality services at reasonable prices. The attorneys and their affiliates are both friendly and knowledgeable. They have a unique approach to providing reliable and efficient services. Contact these highly qualified attorneys at www.collectionfirm.net to experience your ultimate debt solution.

Why Legal Networks Make More Sense than Collection Agencies in This Economic Period

Collecting debt can be a nightmare for many companies, especially when dealing with debt collection agencies that just don’t really care whether or not you ever see results and just want to take your hard earned money. That’s why it is important for you to choose the right fit, so that you not only collect what is owed, but also that you do not waste too much time in retrieving your money.

 

There are two main choices when getting help in collecting owed debt. You can choose to send your accounts to a debt collection agency or you can choose to use the services of a legal network. The advantage over having a legal network on your side is that it puts more pressure on the debtor to pay up. Imagine getting mail about a debt owed from an attorney or law office. This definitely will put a sense of urgency on the debtor to pay as soon as possible, while those getting letters from just an ordinary debt collection agency may not feel that same sense of urgency to pay up right away. 

In additions to that, a legal network can handle a wide variety of collections, including contracts, insurance subrogation, commercial collections, and high technology accounts. The network would also have a retail collections department. This department would help in collecting unsecured loans from finance companies and banks, as well as auto deficiency loans and credit card debt. 

A third department is the medical collection department that will work on a variety of medical finance issues. These would definitely include contract compliance, PPO appeals and HMO reimbursements. Most of your collection problems can easily be handled by one main office. That can make life a lot easier, when you have one main contact to call for questions.

Another advantage is that a legal network can implement skip tracing methods to track down debtors. This involves tracking down those that owe you or your company money. In order to achieve success in collecting on the delinquent accounts, it is imperative that the debtor be located. Debtors may change their phone number to an unlisted one or even move and change their address. They may believe that they have left you behind with no means of contact. While that would be the end of the story with an ordinary debt collection agency, with a legal network on your team, you can rest assured that debtors’ location will be tracked down in order to collect payment. There is really only one simple choice if you want to assure a high success rate of collecting debts, and that is to choose a legal network.

Should you consider factoring or selling your debt as opposed to sending to third party collection firms?

Factoring is a financial transaction whereby a business or individual sells its account receivable (a.k.a. invoices) to a third party (e.g. collection agencies) at a discounted price, for it to be exchange into immediate money to finance the business. It is often misused synonymously with invoice discounting.  Factoring is the sale of receivables, whereas invoice discounting is borrowing where the receivable is used as collateral.  

Some major financial institutions sell their outstanding accounts both pre-charge off and post-charge off rather than have them worked in-house or sent to third part agencies or law firms. One factor is the volume of accounts and another is that they can obtain working capital upfront rather than waiting for funds to be collected over time. The advantage of this move is the invoices will be turned into money that can be use for the benefit of the company. The downside is collection agencies are known for their aggressiveness, so telephone harassment is a possibility. 

FDCPA (Fair Debt Collection Practices Act) only covers third party collections agencies not original creditors. However Federal Trade Commission has issued a Staff Opinion Letter which indicates that, even if a collection agency has purchase a debt, it is still covered under FDCPA as a third party debt collector. Hostile collections can stress out the customer and might think negatively about the company in which he/she original has debt. This might be harmful for future business opportunities.  

Aside to collections agencies, there are other debt buyers in the market. There are law firms, third party collection agencies and even individual entrepreneurs. There are a lot of individuals or companies that buy debts from individuals to large companies.

How the TCPA can affect you in the collection of your accounts?

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The federal law Telephone Consumer Protection Act of 1991 (TCPA) affect the collection of accounts. It restricts the use of automatic dialing systems, artificial or prerecorded voice messages and SMS received by cell phones to send unsolicited advertisements.

According to the TCPA, you may not call residences before 8 a.m. or after 9 p.m. local time. This limits the collection time for the collection agencies and law firms since this is also the working time for most people.

2nd solicitors even collection agencies must maintain a “Do Not Call” (DNC) list and must be honored for 5 years. The major limitation of this law, as enacted was that it was ineffective at proactively stopping unsolicited calls in that the consumer had to request of each telemarketer to be put onto that telemarketer's do-not-call list. This burden was lifted by the Do-Not-Call Implementation Act's establishment of the National Do Not Call Registry and adoption of the National Do-Not-Call list by the Federal Communications Commission (FCC) in 2003.

3rd solicitors, collectors, telemarketers must provide their name, the name of the person or entity on whose behalf the call is being made, and a telephone number or address at which that person or entity may be contacted. This rule is an advantage for the collections agencies for a callback on the customers.

4th calls cannot be made to residences with artificial voices or recordings. Both the FCC and the Federal Trade Commission (FTC) prohibits artificial voices or recordings by telemarketers, collection agencies and solicitors to land lines and cell phones, even when the caller has an established business relationship with the customer, unless that customer specifically agrees in writing to receive such calls. Certain exemptions would remain, including those for tax-exempt charities, health care organizations, political campaigns, etc.

5th facsimile (fax) transmissions that are unsolicited are also prohibited. If a violation of the TCPA has been made, customers are entitled to collect damages directly from a collection agencies or law firms for $500 to $1,500 for each violation, or recover actual monetary loss, whichever is higher.

How past due should be your customer before you decide to turn over to a third party collection agency and law firm?

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The first tier of collection is with first party agencies that are subsidiaries of the company itself, these are from 1 – 30 days past due. Second tier is 31- 60 days past due, this tier, it depends upon the company if they still want the first-party to continue collecting or if they will pass it on to the third-party collections agency. 

Banks, firms or credit card companies resort to third party collections once the account reaches 90 days to 180 days delinquent. Each country and state has their own rules and regulations regarding collection agencies and their practices which are quite often very aggressive.

 

Third party collection agencies, will try to trace the customer and ensure full settlement of outstanding. If the customer is unable to settle the outstanding, the collector will ensure that a settlement plan or a discount strategy – as agreed by the company and the collection agency- is offered to the customers. 

The advantage of first party collection is there is no lag in time between an account becoming delinquent and the beginning of the collections process. Another is you have knowledge of your customers needs and practices, making the client-customer relationship positive even if the later incurred a debt, which helps down the road to keep the customer loyal to the company. Third party collections can sometimes be seen as hostile, however if your clients need your product or service to keep his or her business running smoothly, they will strive to stay on your good side. Sometimes if the customer just hears a familiar voice asking nicely for a payment is enough to keep the problem solved. 

Many times the third party agency or law firm will have settlement authority from the client to settle for far less than the original balance. Now after 180 days and the account’s still in collections it is advisable to have the account transferred to third party agencies or law firms. 

Third party agency or law firm are subjected to Fair Debt Collection Practices Act of 1977 (FDCPA). This law is administered by the Federal Trade Commission (FTC), this federal law limits the hours of collection agency or law firm to call the customers and prohibits communication of the debt to a third party. It also prohibits false or misleading representation and making threats of actions the agency cannot lawfully or does not intend to take.

What is the statute of limitations and how it affects your rights to collect a debt?

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The debt collection statute of limitations refers to the length of time that collection agencies can continue to legally pursue unpaid debts. This means that unpaid debts have an expiration date, after which collection agencies have to stop with their collections activities.

The period of time that may elapse for collecting a debt varies from state to state, but it should not be confused with the credit reporting time limit. These are distinctly separate and distinct issues.

Debt Recovery Statute Of Limitations Time Period

Remember that the debt collection statute of limitations time period starts from the last reported date of activity on the account. This date is shown on your credit report. This is a completely different date from the date the account became overdue.

Account activity can include making a payment, entering a payment arrangement or agreement, and even promising to make a payment.

For example, should a customer elect to make a partial payment, this can effectively reset the time frame back to zero on the day payment is made. Debtors who intend to avoid paying their bills altogether may avoid making any contact whatsoever. These delinquent customers know that by letting the debt collection statute of limitations clock run out, then the window of opportunity for collecting the debt has passed.

How Can The Debt Collection Statute Of Limitations Assist Business Owners?

When business owners understand how the debt collection statute of limitations works, they can start to use these rules to their advantage and help in their debt collection strategies.

Learning how to encouraging late paying customers to make partial payments, payment arrangements or enter into a payment agreement can restart the statute of limitations time clock over again can be a great tool to lengthen the amount of time you have to collect these past due delinquent accounts.

This can also force business owners to rethink their past due debts and take action. When you know that you have a limited window of time in order to collect an unpaid debt, you might reconsider your debt collection efforts. You may even decide to outsource to third party collection agencies to help you recoup your debts sooner rather than later.

What Is Included Under The Debt Collection Statute Of Limitations?

Debts such as child support, income taxes, or federal student loans are not covered under the debt collection statute of limitations, so they will continue to be owed regardless of the amount of time that has passed.

However, most other types of credit agreements are covered.  If you're in any doubt about how the debt collection statue of limitations may affect your own debt collection strategies then it's important that you contact third party collection agencies to help you navigate through your rights.

Why collections is an important part of your business

Managing credit and collecting money are the 2 most important and vital factors which decide the fate of any business.  If you own a business that renders services or sells a product on credit, there is a big chance that at some point you will have a delinquent customer. Account receivables should be considered an asset to your business not a liability that is holding your business back. No matter what your business is or what its size is, at some point or another debt collection will become an issue for you.  Customers who delay payments have become a common scenario these days.   Bad debt or unpaid dues is an unavoidable problem for all organizations which further lead to restricted cash flows hampering the growth of the business.

Right now, with cash tight and business slowing down, companies need to go after the bad debts as a way to raise needed cash.  They need to go after the receivables even it if means getting just something now!

Significant economic change creates opportunities for those who have it in them to deal with it. During economic downturns and worldwide recession the importance of debt collection has come to the fore as a result of the lack of liquidity in the marketplace.  It has been magnified since 2008 with the collapse of many worldwide financial institutions. Consequently, banks have either withdrawn or reduced credit facilities to business and the impact has made firms being unable to discharge their debts in a timely fashion due to the diminished circular flow of funds.  Successful cash flow management should therefore be your main priority. 

 

BAD DEBT is the one major cause for bankruptcy. In a fast changing economy, selling on credit has a number of advantages, especially when it generates a larger volume of business as well as widens one's market share. In fact, selling on credit often 'Makes' or 'Breaks' a sale and at most times gives one that edge over competition. Yet, one cannot afford to take this area of credit control lightly, as too many companies everyday are mounting with debts that are increasingly doubtful of recovery.

The volatile business conditions of recent years have created problems of cash flow and interest charges never before encountered.

Companies large and small have, in many cases for the first time, come to realize that the trade debtors or receivables, on the balance sheet represent a very substantial and expensive consumer of capital employed. They are also now beginning to accept that, in total, trade debtors represent an investment in the market -place on which the expected return is the profit to be earned only when payment has completed the sale. At the same time, like all investments, those trade debtors are subject to the risks arising from the effect of the economic climate on that market-place generally.

A company can have the best product, an excellent sales record and the most dedicated workforce, but if it does not get paid, it will die.  An unpaid debt is a loan being financed by your company - it means that many companies are prevented from achieving their full potential, because instead of using borrowed money to develop and grow their business, they borrow money just to fund their own sales ledgers.

  

REMEMBER: Cash is to business, as blood is to the body -- allow it to drain away and the body becomes weak and eventually dies.