Time Is Money: The Benefits of Outsourcing Your Debt Collections
by: Melissa L. Stuart , Attorney
You own a business-and unless that business is debt collection, you would probably like to focus your efforts on, well, your business. When customers or vendors owe you money, there are many ways to go about trying to collect: You could do it yourself, or hire an attorney or debt collection agency to do it for you.
Debt collection is not an easy task. It takes a considerable amount of time, and sometimes creativity, to reach the people who owe you money. If you or one of your staff members is attempting to collect on this debt it can quickly become a full-time job. It also takes a good knowledge of the Fair Debt Collection Practices Act and state law to effectively and legally collect a debt. If you and your staff are not familiar with these rules, you can put yourself at risk for lawsuits.
Choosing to outsource your delinquent accounts for debt collection can save you time and money if you do it right. First, you will need to choose whether you want to hire a debt collection agency or hire a lawyer to do this work. While a debt collection agency may sound like a more cost-effective choice initially, that may not necessarily be the case. Not all debt collection agencies have an attorney on staff and contract with attorneys for legal expertise.This contract work may be charged in addition to the regular fee that a debt collection agency charges.
The number one reason you should consider outsourcing your debt collection to an attorney is that it will save you time-and your time equals money. It takes time to understand the law, manage the debt collection, and follow the action through its fruition. Attorneys can help in many ways. First, attorneys know how to properly motivate debtors. Receiving contact from an attorney or a well-written demand on legal letterhead can be a motivating factor encouraging debtors to work out payment plans. Second, attorneys experienced with debt collection have access to resources that enable them to track debtors who have moved or changed jobs, which can help maximize the potential for recovery. Finally, if judicial intervention is necessary to help you collect the debt, attorneys are able to efficiently work through that process. Hiring an attorney allows you to focus on what matters most – the future of your business, while also maximizing your potential recovery through efficient advocacy.
There may be instances where an attorney is not necessary, for example with minor debts. But if you are owed large amounts or have complex debt collection needs, an attorney can be a valuable and effective tool to help you maximize recovery. For more information on our debt collection practices, please call or visit [LINK].