When to Hire a Collection Agency

November 17, 2023

If a customer’s invoice due date has passed and you cannot reach them on the phone or via email, it might be time to hire a collection agency. These companies specialize in finding people who haven’t paid their debts and attempting to collect the money they owe in exchange for a commission percentage of the outstanding balance. Most businesses send past-due debt to a collection agency when it’s more than 90 days late, as that’s when the odds of collecting payment on the account start to drop significantly.Source :

The debt that’s sent to collections is still owned by the creditor or lender who extended the credit, so they continue to try to get the money they’re owed. They may use a collection agency to pursue the debt in addition to their own internal department or debt-collection subsidiary. If the debt is collected, the collection agency will receive a percentage of the recovered funds or assets.

Collections Unveiled: Navigating the World of Debt Recovery with a Collection Agency

When a business hires a collection agency to pursue unpaid debts, it’s usually because they don’t have the resources or time to chase down customers who aren’t paying their invoices on time. Collection agencies take the pressure off of a business by managing communications with a client and negotiating a settlement on their behalf in exchange for a commission.

Debt collectors are required by the Fair Debt Collection Practices Act to validate debts they’re trying to recover. This means that they must provide you with a written notice containing the amount owed, the name and contact information of the creditor, and other important details about the debt. The notice must also state that you have 30 days to dispute the debt. If you’re able to dispute the debt within 30 days, it will no longer be considered valid.

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