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Knowing when the right time is to employ legal tactics in a debt collection and recovery case is crucial for business owners to understand. Escalating to a debt collection agency, attorney or lawsuit can strain client relationships, but timing it right is often the difference between a successful recovery and writing off the debt.

Here, the debt collection experts at the Monetaria Group discuss how to chase unpaid and delinquent invoices, what to do and when it should be done, and when to engage the service of a debt collection professional.

How To Escalate a Debt Collection Case to Legal Action

1-3 days after invoicing:

In the initial days post-invoicing, resist the urge to immediately escalate the case to a debt recovery team: there’s a chance the client didn’t see the invoice yet or hasn’t had time to respond to it yet. Send a polite email or make a courtesy call inquiring about the status of payment, referencing the sent invoice, and bringing it back to their attention. This approach shows that you’re following up and intend to see it through, while maintaining a polite and collaborative tone.

READ MORE: How to Improve Your B2B Debt Collection

7 days after invoicing:

After a week passes, gently increase the pressure. Contact the debtor with a more sternly worded email, emphasizing that payment is overdue. Set a deadline, typically 14 days, and speak of your willingness to work with them to achieve a mutually beneficial outcome, but you need their cooperation to do that. Be upfront and ask if they are having financial troubles or have any idea when they intend to pay.

READ MORE: How Much Do Collection Agencies Charge?

21 days after invoicing:

Initiate direct contact with multiple senior executives and leaders in the business. A phone call compels responses more than email, and adds a personal touch as well. Be polite but firm, stressing that it’s the final opportunity for the client to arrange payment before further escalation.

More than 30 days after invoicing:

Beyond 30 days marks a critical point for unpaid debt. If all previous attempts at communication or resolution have been ignored, it’s fair to assume that they have no intention to pay up in the near future, and it’s to enlist the services of a reliable debt collections agency. Hire a recovery firm or debt collections lawyer that is most capable of filling your needs and has experience in your industry. Choose an agency that adheres to legal processes, maintains transparency about costs, and keeps you informed throughout the process. These collection firms can employ legal strategies that ensure debtors respond to creditors, and work out a way to get you paid. Monetaria Group, with over a decade in debt collection and led by an experienced team of debt recovery attorneys, offers top-tier debt collection services, ensuring the swift and efficient recovery of your dues while fostering positive and productive client relations.

READ MORE: When Is It Time To Hire a Debt Collections Agency?

 

We’re happy you found this article informative! Go back to our blog page to find more tips, tricks and guidance on collections, to ensure your business gets paid.

 

If you have unpaid debts that need to be recovered, commercial debt collection may be a good option for your business. A commercial debt collection agency can help you with the process of recovering past-due accounts and provide guidance on best practices for managing accounts receivable.

Led by a team of experienced commercial debt collection attorneys, Monetaria Group has lawyers for debt collection and helped hundreds of businesses recover and collect their outstanding debts and payments. Schedule a FREE consultation with our expert team to see how we can help you recover your money today!

 

Collecting funds from an unpaid loan or overdue account can pose a significant challenge, leaving individuals and businesses unsure how to proceed and how they can recover what is owed to them. Looking into the options available after attempting to collect outstanding invoices themselves, the decision often boils down to employing the services of a debt collection agency or seeking the expertise of a debt collection attorney.

So how should you choose who to use?

READ MORE: Commercial Collections 101

What is a Debt Collection Agency and When To Hire One?

At its core, a debt collection agency serves as the cavalry called in by lenders and creditors when initial attempts to collect a debt reach an impasse. Working on behalf of the creditor, these agencies use various methods to reclaim debts, such as contacting debtors, sending notices, and notifying credit reporting bureaus.Great for handling a large volume of consumer debts, debt collection agencies are particularly suited for creditors looking for a cost-effective and efficient solution.

What is a Debt Collection Lawyer and When To Hire One?

In contrast, debt collection attorneys typically employ legal remedies to pursue debtors who resist payment. Steering clear of aggressive tactics, they opt for a more legalistic approach, including sending demand letters, initiating lawsuits, obtaining judgments, and enforcing these judgments. Having an expert in the legal intricacies of collections and debt law is helpful in complex debt situations, when other solutions have been attempted and rejected. The debt collection attorney you hire will be able to cut through delaying tactics by pursuing strategies that your debtors will have to comply with.

READ MORE: Debt Collection Lawyer or Agency: Which One to Choose?

3 Pros and Cons of Hiring a Debt Collection Agency

 

Pros:

• Cost-Effective for Small Debts: Collection agencies often work on a contingency basis, charging a percentage of the amount collected. This makes them cost-effective for smaller debts.
• Specialized Expertise: Agencies specialize in debt collection and have established methods, making them efficient in handling a high volume of cases.
• Less Intimidating Approach: Collection agencies typically employ less confrontational tactics, which may be more suitable for debtors who are willing to pay but facing financial challenges.This will ensure you’re able to maintain a cordial and professional relationship with your clients, with the hope of working with them again once their financial situation changes for the better. 

Cons:

• Limited Legal Recourse: Collection agencies have limited legal powers compared to attorneys, making it challenging to pursue complex legal actions.
• Ethical Concerns: Some agencies have faced scrutiny for engaging in aggressive or unethical practices, potentially harming the reputation of the creditor. If you’re going to go with this option, as with hiring any person or business to represent you, investigate them carefully before engaging their services.
• Standardized Processes: Agencies may use standardized approaches that lack the flexibility needed for unique or complicated debt situations.

3 Pros and Cons of Hiring a Debt Collection Attorney

Pros:

• Legal Expertise: Attorneys possess a deep understanding of legal intricacies, allowing them to navigate complex debt situations effectively.
• Legal Threat Carries Weight: The threat of legal action from an attorney may compel debtors to settle voluntarily, avoiding lengthy and drawn out legal battles.
• Tailored Solutions: Attorneys can craft customized settlement agreements, considering the unique circumstances of each case and protecting the creditor’s interests.

Cons:

• Higher Costs: Attorneys often charge higher fees, whether hourly or based on a percentage of the recovery, which can be a significant drawback for smaller debts.
• Potential for Intimidation: Some debtors may be intimidated by the involvement of an attorney, leading to strained and damaged relationships.
• Time-Consuming Legal Process: Legal proceedings can be time-consuming, delaying the resolution of the debt and tying up resources for an extended period.

 

READ MORE: What is Monetaria?

So Who To Pick: A Collection Agency Or Collections Lawyer

How to choose whether to go with a collection agency or debt collection attorney to recover the funds owed to you depends on the nature and size of the debt, the relationship you have with the debtor, and resources you have available to you while a third party works on your case. Whatever option you choose that works best for you, it is crucial to ensuring the selected collections agency or debt attorney has the necessary experience, commitment and understanding to address the unique needs of the case.

 

We’re happy you found this article informative! Go back to our blog page to find more tips, tricks and guidance on collections, to ensure your business gets paid.

If you have unpaid debts that need to be recovered, commercial debt collection may be a good option for your business. A commercial debt collection agency can help you with the process of recovering past-due accounts and provide guidance on best practices for managing accounts receivable.

Led by a team of experienced commercial debt collection attorneys, Monetaria Group has lawyers for debt collection and helped hundreds of businesses recover and collect their outstanding debts and payments. Schedule a FREE consultation with our expert team to see how we can help you recover your money today!

Collecting a debt is often more complicated than it may appear, especially with the many state and federal laws and regulations impacting the debt collection industry.

One of the most prominent–and therefore misunderstood–debt collection regulations affecting the industry is The Fair Debt Collection Practices Act (FDCPA), which has seen enforcement expansions in recent years.

Here is a brief summary from the debt collection and recovery experts at the Monetaria Group of how the regulations impact debt collectors, as well as recent changes that may affect their enforcement.

 

READ MORE: How To Recover Unpaid Invoices: Commercial Debt Collection FAQ’s

 

What is The Fair Debt Collection Practices Act (FDCPA)?

The Fair Debt Collection Practices Act (FDCPA) serves as the primary federal law governing debt collection practices, prohibiting abusive, unfair, or deceptive practices by debt collectors.The Consumer Financial Protection Bureau (CFPB) is the governing body responsible for enforcing the FDCPA and taking action against violators. The CFPB was established by the 2010 Dodd-Frank Act. Apart from the FDCPA, the CFPB enforces various federal statutes, including the Fair Credit Reporting Act and the Truth in Lending Act. 

Who Does The Fair Debt Collection Practices Act (FDCPA) Apply To?

The Fair Debt Collection Practices Act (FDCPA) is applicable to debts primarily incurred for personal, family, or household purposes. This includes most consumer debts like personal credit cards, student loans, and medical debts. To correct a common misconception, commercial business debts are not governed by the FDPA. Additionally, creditors are exempt from FDCPA compliance when attempting to collect their own debts. In-house collections departments within entities like credit card companies or hospitals fall outside the FDCPA’s purview in such instances. Similarly, third-party debt collectors who do not routinely collect debts owed to others are not obligated to adhere to the FDCPA.

 

READ MORE: When to Hire A Debt Collections Attorney?

What Limits Does The Fair Debt Collection Practices Act Place On How Debt Collectors Can Communicate With You About A Debt?

Time and Place Restrictions: Debt collectors are restricted in their communication times to prevent inconvenience to consumers. Generally, they are prohibited from contacting individuals at unusual times or locations, especially before 8 a.m. or after 9 p.m. If collectors are aware that personal communications are restricted at a workplace, contacting the consumer there is also forbidden. Consumers have the right to inform collectors if a call is inconvenient, prompting the termination of the conversation.

Social Media and Other Forms of Communications: Debt collectors are not allowed to publicly post about a debt on social media platforms, but can use private channels unless explicitly requested otherwise by the consumer. If electronic communication is employed, such as emails or text messages, collectors must provide a straightforward method for the consumer to opt out, ensuring transparency and respecting individual preferences.

Harassment Prevention: Debt collectors are expressly forbidden from engaging in harassment through any communication medium, including phone calls, text messages, or emails. This prohibition ensures that consumers are protected from undue stress or intimidation during the debt collection process.

Interaction with Legal Representation: If a consumer is represented by an attorney regarding a debt, the debt collector must cease direct communication with the consumer and instead contact the attorney. This rule applies if the collector is aware or can easily determine the attorney’s name and contact information. 

Many states have their own laws about debt collection practices, many of which are similar-but different- to the FDCPA, so it’s advisable to stay informed about your local regulations as well. 

 

READ MORE: What Legal Changes Affect Business Debt Collection: The Telephone Consumer Protection Act In 2024

The CFPB’s Proposed Overhaul of Debt Collection With Additional Regulations

In July 2016, the CFPB introduced proposals aiming to reshape the debt collection market. The proposed changes include requirements for debt collectors to verify the debt, strictly limit communication attempts, and provide detailed information in initial collection notices to advise the debtor of all their options. Notably, if a debtor disputes a debt, the collector must furnish a written debt report before resuming collection activities. Finally, the CFPB suggested a collector may not collect on a debt transferred from another collector with an unresolved dispute until the dispute is resolved.

READ MORE: Debt Collection Lawyer or Agency: Which One to Choose?

How to Ensure Your Debt Collection Complies With The Law

To ensure your work to recover funds owed to you is completely legal and above board, if you’re doing it yourself, make sure to read the latest news and advances in the debt collection law space and speak with debt collection lawyer-friends to make sure you’re doing everything right. If you’re working with a collection agency or debt recovery attorney-or both, like Monetaria, for example-do your research before engaging their services and ask for references to make sure they have a history of effective, legal and ethical debt collection practices.

 

We’re happy you found this article informative! Go back to our blog page to find more tips, tricks and guidance on collections, to ensure your business gets paid.

If you have unpaid debts that need to be recovered, commercial debt collection may be a good option for your business. A commercial debt collection agency can help you with the process of recovering past-due accounts and provide guidance on best practices for managing accounts receivable.

Led by a team of experienced commercial debt collection attorneys, Monetaria Group has lawyers for debt collection and helped hundreds of businesses recover and collect their outstanding debts and payments. Schedule a FREE consultation with our expert team to see how we can help you recover your money today!

Post-pandemic, to say that things have changed across multiple industries would be a serious understatement. The collections agency industry is no exception. In order to ensure debt recovery and proper management of a collections process, organizations must learn all they can about the shifting new environment and adjust appropriately to new laws, regulations, and previously unseen issues.

Like many other companies, debt collectors were forced to shutter their doors or shift to remote operations during the COVID-19 pandemic. State governments stepped in to further limit collection activities during this time. Massachusetts, for example, prohibited collection calls, new lawsuits, income garnishments, and property seizure. Illinois required debt collectors to negotiate reasonable payment arrangements or postpone collection activities for 60 days.

At the federal level, the US Senate consistently debates legislation which would limit debt collection activities during crises like the COVID-19 pandemic. However, debt collection activities continue despite these obstacles. Collection cases have increased during the past decade, with 15% of Americans having been sued by a debt collector. This indicates a shift for debt collectors, who are becoming more dependent on the courts to recover a certain percentage of payments. 

The Consumer Financial Protection Bureau (CFPB) maintains guidelines for debt collectors. Debt collection firms may interact through text, email, and social messaging applications, but with restrictions, such as limited calls to 7 times per week and giving consumers more opt-out choices. 

As a business owner considering working with a merchant debt collector, it’s more important than ever to choose the right one. Selecting a B2B debt collector that is aware of current challenges, follows all new rules, and maintains a good reputation is essential. Failure to do so may result in legal trouble and harm to your company’s reputation. 

In this new post-pandemic landscape, Monetaria Group has emerged as one of the most trusted and dependable collection agencies in the industry. With an emphasis on responsibility, full compliance with the latest rules and regulations, and maintaining an exceptional reputation, Monateria Group strives to obtain the greatest possible results for its clients. 

By working with Monetaria Group, you will be aligning yourself with a committed staff of experts that is up to date on industry standards and trends, and can offer the most up-to-date and experienced advice on collections.

 

We’re happy you found this article informative! Go back to our blog page to find more tips, tricks and guidance on collections, to ensure your business gets paid.

If you have unpaid debts that need to be recovered, commercial debt collection may be a good option for your business. A commercial debt collection agency can help you with the process of recovering past-due accounts and provide guidance on best practices for managing accounts receivable. 

Led by a team of experienced commercial debt collection attorneys, Monetaria Group has helped hundreds of businesses recover and collect their outstanding debts and payments. Schedule a FREE consultation with our expert team to see how we can help you recover your money today!

 

Have you ever worked with customers who can’t seem to pay their bills on time? Despite your best efforts, reminders, and more, your invoices never get paid. When this happens, it’s time to consider commercial (B2B) debt collection. But don’t freak out! We’re not talking about a scary debt collector knocking on your customers’ doors. In fact, B2B debt collection is very different from consumer debt collection.

Monetaria is here to help with some best practices for navigating the debt collection process and taking advantage of the best debt recovery resources. Don’t let missed payments hold your business back, and learn how to collect what you’re owed in an ethical and efficient manner.

Why do we need commercial debt collection?

Unpaid invoices can have a huge impact on your business, including reduced inventory turnover and cash flow, damage to your company’s reputation, credit ratings, and overall financial health. To maximize your chances of recovering unpaid debt to your business, it’s important to take action as soon as possible. 

Overdue invoices need to be addressed within the first 45 days following the due date. The longer an invoice remains outstanding, the harder it is to collect. Most terms request payment within 30 days, so if an invoice remains unpaid for more than 60 days, it’s considered a bad debt and requires commercial debt collection. 

 

B2B debt collection by yourself

Before reaching for an outside research, it’s always a good idea to try reaching out to your customer directly first.

• Telephone calls have proven to be the most effective technique for business debt collection. By making a personal connection with the customer, you have a better chance of having your invoices take priority over other payments.
• Debt collection letters can serve as more serious reminders stating the unpaid invoice, requesting prompt payment, and advising of more action to come if non-payment continues. 

B2B debt collection isn’t only about the money owed; customer relations and the time and energy you will spend collecting the debt should also be taken into consideration. Sometimes it’s better to write off small invoice amounts for the sake of preserving a business relationship. Ask yourself if it’s worth chasing a small amount that’s going to cost more in time and resources to collect.

 

External options for debt recovery resources 

If your independent collection efforts are unsuccessful, it’s time to look at external help. Such assistance might include:

• Engaging with a commercial debt collection agency
• Partnering with a trade credit insurance provider

What you choose to do will depend on the debt, your business, and the relationship you have with the debtor. Consider your options carefully and choose the one most likely to result in a satisfactory outcome. 

 

What are Your External Options for Business Debt Collection?

If your efforts to collect business debt on your own are unsuccessful, you may need to consider seeking external help that may include;

• Engaging a business debt collection agency 
• Partnering with a trade credit insurance provider.

Your best option depends on your debt, business, and debtor relationship. Consider your options carefully, then select the one that will most likely result in a satisfactory outcome.

 

Working with a business debt collection agency

Business, or commercial, debt collection agencies specialize in collecting commercial debts on behalf of a wide variety of businesses. Their goal is to collect the full balance from the debtor while trying to avoid litigation. The agency usually doesn’t own the loan. Instead, it will act as a middleman between you and the customer, taking a percentage of the collected amount for services rendered.

 

Debt collection with trade credit insurance

Partnering with a trade credit insurance provider can also be a great solution to your commercial debt issues. Trade credit insurance safeguards your cash flow by covering your receivables due within 12 months against unexpected commercial risks. If your customers become insolvent or fall into protracted default, you are indemnified for the value of goods and services you have delivered.

Debt collection management is an eventual responsibility of all business owners. The outcome depends on how you approach it. Maintaining good customer relations and cash flow requires prompt yet strategic action. At Monetaria, our experts are equipped to help you through all stages of the commercial debt collection process and find the best debt recovery resources for you. Reach out to us today for help navigating these challenging issues, and get back to running your business.  

 

We’re happy you found this article informative! Go back to our blog page to find more tips, tricks and guidance on collections, to ensure your business gets paid.

Read on for more about commercial debt collection:

• What is Commercial Debt Recovery and Collection?
• 7 Reasons to Use a Debt Collection Agency
• Understanding Commercial Debt Collection

 

If you have unpaid debts that need to be recovered, commercial debt collection may be a good option for your business. A commercial debt collection agency can help you with the process of recovering past-due accounts and provide guidance on best practices for managing accounts receivable. 

Led by a team of experienced commercial debt collection attorneys, Monetaria Group has helped hundreds of businesses recover and collect their outstanding debts and payments. Schedule a FREE consultation with our expert team to see how we can help you recover your money today!

Getting a call from a debt collection agency can be a nerve-wracking experience. Debt collection agencies work with businesses with outstanding payments and invoices due, to help them collect what is owed to them.

It’s important for debtors  to understand the position these businesses are in: In order to survive, let alone thrive, they need to be compensated for the products and services they offer to ensure they’re able to pay their own vendors and ensure their business’ financial security. Getting a call on their behalf from a third-party debt collection agency is just them trying to connect with you to settle your account so that all parties can move on.

Understanding how debt collectors operate, as well as your rights in the debt collection process, can help you prepare for interactions with them.

Here are 5 steps to deal with collection agencies, in a productive and pleasant manner.

1. Be Willing to Communicate

Communicating with debt collectors can make it considerably easier to resolve your debt. When you pick up the phone when they call, call first, and respond to letters and communications, you signal your willingness and desire to come to a positive resolution and will garner goodwill towards you.

Related: How To Work With A Debt Collection Agency

2. Organize Your Information

Before you decide on a course of action, you should organize every piece of information you have regarding the debt. Ask the debt recovery agency for all the information they have on your case, to ensure it really is your debt to settle and allows you to make an educated decision about how to handle it.

3. Know Your Rights

Collection  activities are regulated by a number of federal and state laws. These laws outline the rights and responsibilities of both the creditor (the business trying to collect the debt) and the debtor (the party that owes the debt).

At the federal level, the Fair Debt Collection Practices Act (FDCPA) sets out rules for how consumer debt collectors can interact with debtors. While the FDCPA applies to personal, family, and household debts, and not to debts incurred by businesses,  many states have their own debt collection laws that apply to commercial debts, and these laws may provide additional protections for debtors. In addition, many commercial debt collection agencies voluntarily act in accordance with the FDCPA regulations so that they can ensure their collection activities are as above board as possible.  

In addition to these laws, there are also industry-specific regulations that may apply to commercial debt recovery and collection. For example, the healthcare industry is subject to the Health Insurance Portability and Accountability Act (HIPAA), which has provisions related to the collection of medical debts.

When looking at hiring a third-party collection agency, it is critical to ensure they are qualified and credentialed, including having the requisite collection licenses and bonds. Monetaria Group is led by a team of debt collection attorneys, which lets clients know all their debts and cases are being handled legally and competently, with no chance of trouble down the road.

Speak to your own network to ensure your rights are being respected.

Related: How To Hire A Debt Collection Agency

4. Proactively Work to Settle the Debt

If you wish to settle the debt and put this headache behind you, you can try offering the debt collector a sum that is lower than the original debt. Commercial debt collectors are often willing to negotiate if they feel you’re working and positively communicating with them. They also may be willing to set up a payment plan so you don’t have to pay the full amount right away.

5. Put the Debt Behind You

Once the debt is being handled and paid off, you can move on knowing that no one will bother you about it again. Working to handle debt doesn’t need to be an unpleasant experience, and shows you own your responsibilities as a respectable member of society.

 

We’re happy you found this article informative! Go back to our blog page to find more tips, tricks and guidance on collections, to ensure your business gets paid.

If you have unpaid debts that need to be recovered, commercial debt collection may be a good option for your business. A commercial debt collection agency can help you with the process of recovering past-due accounts and provide guidance on best practices for managing accounts receivable. 

Led by a team of experienced commercial debt collection attorneys, Monetaria Group has helped hundreds of businesses recover and collect their outstanding debts and payments. Schedule a FREE consultation with our expert team to see how we can help you recover your money today!