Collections Insider

Getting a money judgment against someone is only part of collecting what’s due to you. (more…)

Over the years many of my clients have asked if Final Notices are required prior to account placement with a collection agency. The answer is no – you are not required to send a Final Notice prior to placing your claim with a collection agency. However some of my clients have found that this step brings them positive results, as the threat of sending the claim to a collection agency can inspire the debtor/customer to finally contact them with payment arrangements. So are they effective? Sometimes. Some of my clients like sending Final Notices because this step makes them feel like they have done everything they could before placing the claim with a collection agency. The last attempt to get the debtor/customer’s attention also helps the client to feel better about having to pay a collection agency.

If you choose to send a final notice make sure to use concrete time frames and consequences. A final notice could say something like this, “This is your Final Notice. You have until July 10, 2007 to contact our office with payment arrangements. Otherwise your file will be referred to our collection agency.” Be sure to stick to your deadline and forward the claim to your collection agency immediately after the deadline, so that the debtor/customer knows that you mean business. Wishy washy behavior will send the message to the debtor/customer that there are no real consequences for their behavior. Think of the Final Notice as another collection tool and if you’re going to use it, use it well.

Recently I was going through my e-mails from ACA International, a trade association for credit and collection professionals. I came across a recommendation for a book written by Brian Tracy called “Goals!” I did what I normally do; I immediately went to Half.com to search for the book to see what it was going for. I’m not one to pay full price for books. I found the book at Half.com for $4.00 or $5.00 so I ordered it. I figured I had nothing to lose except for a few dollars. I had been looking for something to help me organize my work day and to help manage the growth of my collection agency more efficiently. I was not expecting the additional gifts I received by reading “Goals!” Not only did this book help me to organize my work day but it helped me organize my thoughts and my life. I immediately put Tracy’s suggestions to work and they helped me tremendously. Putting my day in order, setting up small goals throughout the day and asking myself if this task is taking me where I want to be in my career seems pretty basic but I think we get lost in the flow of the day. Things weren’t always getting done and now they are. I have also used his techniques in my personal life and find that my time is no longer wasted but utilized in a way that brings me joy. Don’t misunderstand, Tracy’s ideas aren’t innovative but his simple style and direct way of writing gets you back on track and sometimes that’s all you need. This book gave me a shot of confidence to try harder. Tracy reminded me that only I know what I want and what direction I want to take my business, career and life. I think this book is great for new entrepreneurs and for those of us who have been around the block but need a mild kick in the pants to help us refocus. Tracy also has a great web site http://www.briantracy.com/. He offers free newsletters and you can purchase his books there as well. Enjoy!!!

Many clients approach me about collection claims but they have no supporting documentation to prove their claim. Collection agencies need proof that the debt exists. Simply saying they owe you money is not enough. Debtors can request proof of the claim and collection agencies must provide this proof if asked. There is no way around this fact. My suggestion is to use contracts, applications, leases, rental agreements, rental applications etc. Get your debtors information upfront. Don’t do business with a handshake. This form of a “contract” makes it difficult for the collection agency when the debtor defaults. Be sure to use invoices when billing your customers. Invoices can also be used as proof of your claim. If a client approaches me about handling a claim without proof I normally recommend they take the matter to court. A judge will then make a decision based on the testimony of each party. If a judgment is issued to my client then we can pursue the debtor on the client’s behalf as the matter has been decided in a court of law and makes the debt valid.