International Debt – A Growing Area of Collections

Today’s marketplace is becoming increasingly global.  With the rise of the Internet, it is possible for businesses to operate virtually everywhere.  This is a profitable turn of events, but it can also mean that a business is left with payments owed by consumers in other countries.  As each nation has its own laws, it can be tricky or time-consuming to collect on the debt of customers in other countries.

If a business has significant international debt, it may be a good idea to bring in a collection firm.  The attorneys in a collection firm may be better equipped to collect on international debt because they can easily access and better understand the law specific to each country in which the debtor resides.  An attorney may also have more time to work within the time zone differences inherent in dealing with debtors overseas – assuring that attempts to contact the debtor do not violate that country’s collection laws. 

A collection firm is also more likely to have the resources to deal with the foreign language issues that come up in dealing with international debt.  It is often the case that the business owner does not have the staff or resources to spend time reaching debtors in Asia or Europe or Africa.  Even once the debtor is reached, understanding must be achieved. 

It may be necessary to actually file suit against the debtor, as the customer is unlikely to take informal collection efforts as seriously as legal action.  In this case, it is essential to have an experienced lawyer, who is informed about diverse international collection laws, handle the case.  A collection firm that handles international debt is likely to be well versed and very busy, as it is not a huge area of practice in the US.  It would be wise for a business to utilize a proper collections attorney for collecting on international debt, creating the best possible settlement on the debt.

I run an online business and have clients from all over the world. I have one particular account that is very overdue, and my efforts to collect are not working. The client resides in Asia and the laws are confusing. What is my next step?

How the TCPA and FDCPA are Affecting Consumer Collections in a High Technology Environment

No matter who is making an effort to collect on a debt, there are very specific laws that must be followed.  The Telephone Consumer Protection Act (TCPA) sets forth some very specific provisions that may make it very difficult for a company to use automated technology to collect on debt.

One example of how the TCPA affects collections is that it prohibits automated recordings or any artificial voices to call any cellular phone without getting the express permission from the Debtor.  In an age when home telephone service is becoming obsolete, and most Americans carry only a cell phone, this law can cause a serious impediment to any automated collection efforts.  If an agency does violate the TCPA—the penalties are severe-$500.00 per automated call plus attorneys fees and maybe even punitive damages or a class action lawsuit.

In addition, the FDCPA requires a (FOTI) message be left when leaving any message  which basically states that certain identifying information be provided when leaving a message with a debtor – name of caller, name of entity, and the phone number or address of the entity – leaving the indebted party unlikely to return the message and pay the debt . It also opens up the collecting entity to potential third part disclosure lawsuits as well.

Despite an ever-automated world, federal regulations such as the TCPA and FDCPA are making automated collections more and more difficult.  This means that your business or the collection firm you have hired will need to use more non-automated resources, such as having staff on hand to place the calls, and lawyers with specific knowledge of collection law.  This will ensure that in the process of collecting the debt, no fines will be incurred, and the settlement will be worth the time, effort, and money expended to retrieve the debt.

I am a small business owner and I have a few clients with outstanding debt. At what point should I begin the collections process with these accounts?

Commercial Debt – How to Collect on Commercial Files

Whether a company is large or small, it is essential to have accounts paid within a reasonable amount of a time, bringing funds back into the business.  Having a balanced sheet in accounts receivable can make or break a business. 

The first step is to set up clear expectations and to send regular billing statements.  Bills should be sent every 15 to 30 days, so that the client has no doubt that payment is expected in a reasonable time frame.  If a customer becomes more than sixty days behind in payment, there is a greater risk that the bill will go unpaid.  It is a good idea to reach out to clients well before sixty days and request payment.

In the event that a customer is unresponsive to attempts to settle an account, it may be time to become more assertive.  Placing phone calls may help, but in many cases, business owners do not have enough staff or time to place repeated calls to someone who is behind on payment.  At a certain point it may be necessary to call in the help of a collection firm.

Using a collection attorney may be an excellent solution to securing the debt owed to any size of business.  A collection firm will most likely have more time to devote to the process, and certainly will have knowledge of collection law.  This can free up the employees and owners of a company to focus on the daily business operations, and often provide a much quicker resolution to the collection issue.  Collection firms are up to date on the most current changes in collection law, and often clients will take efforts from an attorney with great import, settling debt and leaving more of the budget available to the business.

Municipal Debt— How To Collect On Government Debt

Municipalities have encountered many fiscal challenges over the years since the recession began in 2008.  Government funding has been cut, making it more important than ever for municipalities to collect the debt owed to them.  They need to increase payments coming in from fines, water bills, parking fees, and any other debt owed, or they run the risk of being in a dangerous financial situation.

Municipalities often have limited personnel devoted to the collection of unpaid fines, taxes, and other debts owed by the population.  Despite this, it is important that each debt be recovered, as each has an effect on the budget of the municipality. 

A collection lawyer may have more resources available to track down and secure outstanding debt from the citizens of a municipality.  Individuals do not tend to want to pay their taxes, nor the fines they incur in a city.  These debts can be turned over to a collection firm, which may have greater success in recovering them.  A collection firm is set up to handle the collection process much more efficiently than a municipality.  Once an individual is aware that the debt is not going to be ignored, they are more likely to settle it.  It may even be a good idea to have a collection firm handle the billing of all debts. 

With a collection law firm working on their behalf, municipalities can focus their time and other resources on the more pressing daily tasks.  Collection firms can often handle debt collections from many states, regardless of location.  Having a collection lawyer – who is experienced in speedy settlements – handle a municipality’s debt collection results in faster and fuller payment of the debt owed by its citizens.  In a time when funding is sparse, this helps to keep the budget robust.