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.

Are Government And Municipality Collections The Area To Focus In As Debts Mount For Cities And Towns?

Image courtesy of  Pat Hawks

Due to the limited number of personnel and the enormous amount of work to be done in all facets of city and town business, it is often difficult for these entities to collect unpaid taxes, fines, and other debts owed by citizens.  However, every unpaid debt, regardless of the amount owed, affects the city or town’s operating budget to a degree.  With states cutting the budgets of local governments more and more each year, it is important that as many debts as possible are recovered. 

Government and municipality collections may be the area to focus in as debts continue to mount in cities and towns.  With a provider of collections to continue collection efforts on their behalf, local government agencies can focus on their daily business.  While some debtors may find it easy to disregard correspondence from their local government or municipality agency in regards to a debt, collections services can be much more effective.  One reason for this is the amount of time and effort that a collection service can put into collection attempts.  Town and city governments are limited in the amount of time they can put toward making phone calls and writing collection letters to recover debts, but this is not the case for a collection service specializing in such matters. 

With the focused collection attempts provided by a collection service, the debtor will not be able to ignore the collection attempts, which were likely more limited and sporadic when provided by local agencies.  When the debtors realize that the matter of their debt is not going to be dropped, they will be more likely to pay the debt.  The push from a government and municipality collection service may be just what is needed to get the debt settled.  Although it is not likely that every debt will be recovered, the percentage that are will be a boon for the city or town’s budget.  

What are some of the reasons government and municipalities end up with large amounts of debt?