Can cities use debt collectors to collect on municipal debt?

Are complaints against collections practices being resolved?

FTC: When It Comes to the TCPA and FDCPA, Everything Counts

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For an industry that relies so heavily on communication devices to reach their targets, debt collectors have been carefully watching how the Federal Trade Commission interprets and enforces laws relating to their business for decades.  Collection agencies and collection attorneys have been paying particular attention to the Federal Debt Collections Practices Act (FDCPA) and the Telephone Consumer Protection Act (TCPA) because the language of both acts – the first written in 1977 and the latter amendment created in 1991 – predate many modern technologies, especially text messaging and ringless voicemail.

The FTC has no rulemaking authority, but frequently uses its enforcement authority to telegraph how it plans to interpret rules and regulations going forward.  Recently, the FTC brought the first case against a collection firm based in Glendale, California that involved the sending of text messages and found that the firm had violated the clear disclosure rule of the FDCPA when it used text messages that made no reference to debt and did not obtain prior permission from the consumer.  The company in question agreed to a $1 million settlement and to accept guidelines for future collection attempts.

The ruling was enlightening because the FTC chose its words very carefully to state that it does not matter where the transmission was targeted (i.e., a land-line phone or device).  In fact, the FTC underlined the issue in a post to its web site, writing ‘Regardless of the means you choose — mail, phone, text, or something else — the law applies across the board.’

Thus, the FTC’s policy going forward is relatively clear: There will be no tolerance for “loopholes” regarding text messages or so-called “ringless voicemail” messages that bypass a mobile phone’s ringer and allow direct recording to voicemail.  The FTC clearly intends to regard any communication without clear and prominent disclosure as a violation of the FDCPA and/or the TCPA.

How many debt collection firms meet or exceed the FTC's $10,000,000 revenue baseline for review?

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?

Legal Collections And How To Get More Monies From Existing Judgments Through Asset Searches

People who do not want to pay their debt are often quite accomplished at hiding assets that could satisfy the outstanding balance.  Finding those assets can be quite tricky for the collection attorneys and sometimes nearly impossible for the creditor.  If a debtor moves his assets into different accounts, that should not be too difficult to detect.  However, when the debtor moves monies internationally, it may not only be extremely difficult for the businessperson to find those accounts but it will be an extraordinary feat if he would actually be able to get his account paid.

Discovering Assets Through Internet Searches

Searching for assets may involve anything that has a monetary value.  Assets are frequently in the form of real estate.  Luxury cars or collectible vintage automobiles, yachts, motor boats, airplanes and even all-terrain vehicles can be turned into cash to effect a satisfactory debt settlement.  Collection agencies conduct asset searches on an everyday basis.  It is a valued tool in their profession.  With internet access to an infinite number of specialized sites that track a person’s cash flow through bank account balances and purchases and sales.  Checking the registration of automobiles or other vehicles may increase judgments considerably from the hidden additional assets.

Assets International

Unfortunately for creditors, assets can be hidden all over the world.  It is not unusual to have a judgment against a person of one nationality who has several real estate properties in another country.  Collection lawyers are well aware of that possibility and many are educated and experienced in finding those assets no matter where they are.  The transfer of money has to adhere to strict regulatory laws with full disclosure to the proper authorities if there is an infraction.  Many try to circumvent those rules and regulations by transferring their assets to islands that adhere less strictly to international financial laws.  When an outstanding debt is due to be collected, agencies specializing in recovering those debts will find every asset available for their client.  

Can Municipalities Benefit From Collection Attorneys And Agencies In Collecting Their Debt?

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Debt collection for municipalities is a lot different than most other non government collection procedures.  The truth is that a municipality, just like a regular business will need to collect on different services or fees associated with the area.  The problem is that a lot of municipalities do not have the funds necessary to hire people full time and that is when a collections law firm can be there to help them. 

Why It Is More Important Now

The federal and state governments have made severe cuts in the past which means that most municipalities have seen their budget cut.  They need to get the cash coming in from parking fees, fines, water bills etc or they may face a dire financial situation.  Defaults also increased as the economy took a turn for the worse making it more important than ever to have a firm that can be successful in collecting debt for them.

Bad Signs

The clue to look at in order to know how bad the payment of those fines and fees are is the amount of time that they have been without a payment.  A payment that is behind over 60 days is thought of as a high risk for non-payment.  If your municipality has a lot of those then you could be in the red for a long time because you still need to pay bills on time.  You may need to consider bonds or other ways to raise revenue.

Best Options

A collections firm is a great option to get money in from unpaid fines and fees because it is cheaper than hiring full time employees and they have more experience to get the job done right.  Another option is to hire the firm to handle not just collections but also billing so that there are fewer delays in the payments altogether.

When Is It Time For A Municipality To Hire A Collection Attorney To Help Them Collect Debt?

Your Options For Debt Collection

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If you have debt owed to you, you may be wondering just how you can go about getting the money.  Businesses that aren't able to collect the money owed to them can face a huge disadvantage as they may need those funds to further their business.  There are plenty of options of how to go about collecting the debt and most people will go in order, from the least aggressive to the most aggressive option. 

Do It Yourself

Many companies do not want to spend the money to hire a collection agency or collection attorney to help them get their money back.  These companies will try to send letters or call the person or company that owes money themselves.  While this can occasionally produce results, there are many cases where it will not.  When attempting to collect the money yourself does not work, it is best to turn to a professional with experience in the matter. 

Collection Agencies

The next obvious option is for your company to hire a collection agency to help you get your money back.  In some cases, this will work simply because it will be a wake-up call to the debtor or it may bring up more concerns about future credit ratings.  In addition, these collection agencies are experienced in these matters so they know the best methods to ensure you receive your money. 

Dedicated Collectors

If you have hired an experienced collection agency and are still having troubles collecting payments, there is a more robust collection program such as more letters or phone activity.  They will use their vast experience to come up with a solution that works for both your business and the debtor.  Even if the debtor is only able to pay part of the debt in these difficult cases, it may still be worth it with the current economy.  

Four Tricks To Selecting The Best Debt Collection Agency For Your Business

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There are many great debt collection agencies that can help your business save the bottom line, and get you the money you are owed. But there are also many debt collection agencies that will not fulfill your company's needs, so here are four tips to help you choose the right debt collection agency for your business.

The Agencies Reputation

As with most of the hard decisions for your company, word of mouth information can be the best way to tell whether or not a debt collection agency will be right for you. There are also many listing websites that can tell you what the highest rated agencies are and some testimonials on how the agency has helped other businesses.

Industry of Collection

Different debt collection agencies specialize in different industries. Making sure that you choose a debt collection professional that is familiar with the industry that your company is in will help you choose a debt collection agency that is right for you.

Timely Remittance

Make sure that the debt collection agency that you choose has a timely remittance policy, so you can ensure you will get your money and get it back to work for you, as swiftly as possible. Some debt collection agencies can hold your money for a long period of time, so this is also very important to check.

Cost Effectiveness

Budgeting a total cost to loss ratio when choosing a debt collection agency is an important consideration. Make sure you are not paying more than you would be collecting from potential debtors. The idea here is to improve your bottom line, and if you are paying for more than you need, you are wasting money on a useless service. Many good companies will grade the costs of their services to your needs. 

Top Reasons Debt Collection Agencies Are Merging

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Across the board more and more debt collection agencies are merging.  These mergers take different forms, include two or more companies and often put the collection agency in a better financial state.  For some, the idea of a debt collection agency merging with another can bring up questions and not the least of which is simple; why? Consider some of the following reasons these agencies are merging. 

Lowered Costs

Two debt collection agencies coming together to make one often reduces much of the costs that are going out.  Companies can combine assets so they will not have to purchase double, therefore saving money this way as well.  It is also not unusual for companies that consolidate to share office space and therefore save substantially this way as well.

Pooled Resources

One reason that costs will be lowered when a company is consolidated is because they are able to pool their resources.  Besides helping to reduce costs, pooled resources will help a company be able to tap into a larger base of potential assets for what they need.  With collection agencies it often means one call center instead of several.  It will also mean that key employees can help from one company to the next.  This pooling of resources will often make it easier to take care of clients as well as keep costs lowered and increase profits. 

Harsh Economy

It is no secret that the economy is in a prolonged stall to say the least.  In order to stay alive in this stagnate economy more and more companies have to get creative with their business plan.  The economy has made it difficult for many people to stay in business and this difficulty has climbed right up the ladder to even the largest debt collection agencies. 

Business Development

When collection agencies consolidate together they often are able to learn from each other.  One company may be excellent at marketing while the other company may be better at customer relations.  Sharing these skills and teaching each other how to acquire them can go a long way to building a better company overall.  

Collecting Debts From A Run Away Debtor

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When you have invested your time and money into a suit, it is frustrating to have the case awarded in your favor, only to find that the debtor is no longer in the state.  Once you track the debtor down, then you’ll have to pursue your judgment.  It is not uncommon for a debtor in a suit to change locations, but that doesn't mean that it will be difficult to collect a judgment from a state other than the one the judgment was awarded in. 

What About Cross State Moves?

Some plaintiffs are under the false impression that if a debtor moves to another state before a judgment is settled that they will have to get a judgment in the new state, and that they will need a collections attorney to complete the process.  However, this is inaccurate on both points.  The plaintiff can take care of the paperwork himself, as it typically involves a relatively simple form that registers the original judgment in a civil court in the new state.  For the quickest results, register the judgment in the county where the debtor works or owns property. 

The Finer Details

After you have registered the previously awarded judgment in the debtor’s new locale, then you’ll need to contact the sheriff’s department of the county in which the judgment was filed.  The sheriff’s department can then put you in contact with whoever is levying officer of the county.  This person should be contacted to find out what needs to be done in order to pursue the judgment. 

A writ may be necessary, in addition to the newly registered judgment as well as the original.  Once the levying officer is aware of the judgment and has all of the necessary paperwork, then the claim can be pursued.  Once the debtor’s assets have been located, you will be able to collect on your judgment.  If you have questions regarding your ability to receive your judgment from a debtor who has moved, contact the law offices of Ross Gelfand.  

What are some of the best methods to get clients to get clients to pay on balances?

Collecting Medical Debt With The A Collection Attorney Is The Way To Go

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When a bill has been overdue for several months, most companies will turn the debt over to an agency like a debt collection law firm.  Some debts are easier to collect than others.  Medical debts are probably the most emotionally or morally difficult debts to retrieve.  Collecting from someone whose bank account is already cleaned out from necessary medical treatment seems like kicking that person when he is down.  No one likes to do that.  That is why communication is so important.  Collection lawyers are trained to offer options of how to resolve debt problems.

Medical Debts Are Hard To Collect

Medical service institutions like hospitals, rehabilitation centers, doctor’s offices and companies that provide medical tests often do not have the time to pursue people who owe them money.  Debt collection agencies provide a valuable service for the institutions that provided services without being compensated.  While in an ideal world everyone should be able to receive free medical treatment, the cold, hard truth is that if everyone were to get treatments and care without paying for them, the companies providing those treatments and care could not stay in business. 

Do Not Fight With Your Clients or Customers

Some businesses actually have their own staff that handles delinquent payments for sometimes up to six months before turning them over to dedicated collection attorneys.  It makes sense to let a collection attorney work with non-paying clients.  When a collection attorney works with the debtor, the business is removed from exerting pressure on the client to collect the debt.  Businesses want their clients’ or customer’s business.  They do not want to be identified as treating their customers, clients, or patients in anything but a professional and congenial manner.  Unfortunately, no business can afford to ignore client debts unless they want to risk being in financial difficulty themselves.  A collection law firm will take on the role of getting the debt paid without repercussions to the business itself.

I have a customer or client that has not been paid in some time. What proactive steops should I do to recover the debt?

Three Essential Steps For Successful Business Debt Collection

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The challenge for every debt collector is to be paid.  He either wants to be paid himself or, if he is working for a client, he wants his client to receive the money that is owed to him.  It is often difficult to determine who is sincerely trying to pay their bills but is unable to through no fault of their own, or who just doesn’t care that he is in default.  There are numerous reasons why a person may have legitimate problems meeting payments.  A good collection attorney will work with the debtor.  Open communication routes are the best way to get debts settled.

Know the Law

Every day, debt collectors face disgruntled debtors who cannot pay the money they owe.  This makes it difficult to have a good attitude at times.  However, a demeanor of understanding and patience, yet firmness in obtaining the owed money, will serve the debt collector well.  Many debt collectors are either collection attorneys or they work for a legal firm in another capacity.  Knowing the law and what can be said within the limits of the law, is essential.  Otherwise, the debt collector makes himself, or herself, vulnerable by breaking the law.

Offer Solutions

If the debtor is so tired of getting phone calls that he simply declines to answer, you should write letters.  Collection agencies should have some standard letters that can be revised to the individual debtor.  Make your demands known without harassing the debtor, but also offer a solution of some type of payment plan.  If the debtor is trying to repay his debt, an alternative payment plan may be the answer.

Perseverance

It often takes many repetitive calls and letters before a debtor is finally in the position to pay his loan.  Debt collectors must be very motivated to get the account closed.  Their self-motivation and perseverance are often the tools that finally collect the debt.  This may be the key to get paid by the person who originally had no intention of paying his debt.  

What are some of the biggest obstacles faced by businesses attempting to collect on debt?

Top Three Commercial Debt Collection Obstacles Facing Business Owners

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Business revolves around credit.  It is good business strategy to extend credit to credit-worthy customers.  There are times when this “buy now, pay later” strategy backfires.  Sometimes a debtor cannot pay for the things purchased on credit.  You may not have any other option but to hire someone to collect the money that is owed to you.  It is not always as easy as it may seem to convince someone that he has to pay up.  There are a number of hurdles to cross before a collection agency can mark their account as “account received.”

1.       Excuses From The Debtor

Some debtors are truthful and relay their problem with temporary cash flow to the collection attorney.  Others, however, come up with every excuse under the sun.  Beginning with the often cited “the check is in the mail” to someone in their family died, even if that is not true, it is sometimes impossible for the collection lawyer to tell fact from fiction.

2.       Business Closing

When a business cannot sustain itself any longer, it will have to close.  This is usually at great cost to the owner and his creditors alike.  While this is unfortunate, better business practices would have prevented going into debt collection.

3.       Entering Bankruptcy

Once the debtor is in such dire financial straits that he must file for bankruptcy, all financial obligations are processed by the bankruptcy court.  A collection agency, or collection law firms, will have to turn toward the court to recover as much as possible of the owed debt.

It is usual practice to call a debtor first to remind them of their account in arrears.  A letter referring to debt collection would be the next step.  The last course would be to hire a collection attorney.  When all your efforts do not produce any satisfactory results, you may have to hire a collection law firm to recover your money.  Problems of this nature can often be avoided by a proactive business approach.  

What Are Some Of The Best Ways To Collect On Old Debts?

Best Way To Collect On Old Debts

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When receivables reach the 60 day mark, it’s time to make some quick decisions so they can get collected on quickly and with little expense.  If you outsource the collection you will of course pay a fee, but if you attempt to get it done yourself and it takes too long you can wind up having a credit rating drop substantially.  

If you have a close hand on the debts owed to you then it may be an option to try and figure out what type of people you are trying to collect from.  There are many times that you might just be dealing with someone that is slow to pay and there are other times you could be trying to get blood from a stone.  These differences can help you make the decision on what to do about the debt.  The slow to pay person may benefit from more serious urging in the form of a letter and phone calls, while the person without any money or no response probably needs  to be outsourced. 

There are a few tips that can help make it easier and insure that you get more money.  Some of them are as follows:

• Keep a stack of form letters and notes that you can easily fill in the blanks and send out. 
• Always charge a percentage for late payments and for attempts at collecting. 
• Consider converting into promissory notes. 

Why consider turning debts into promissory notes?

When you take the time to convert an old or bad debt into a promissory note you are technically changing it into a current obligation from something that was nearly forgotten.  Banks will look at this much differently than a debt they see you haven’t been able to collect on. 

Transferring several invoices for bad debts into one cohesive promissory note is a clean way to eliminate confusion about what is owed to whom.  You can also stipulate in the promissory note the coverage of different fees such as collection or attorney fees.  You will need to get the client to sign the note which will also let you know their intentions.  If they don’t sign it’s a good time to turn them over to a collections law firm or agency.