Starting a business comes with a lot of moving parts and debt collection may be the last thing on your mind. However, new business debt collection must be done for your business survival. If you are about to start a new business, you will not worry about debt collection yet. But, establishing a process on how to collect a debt is a vital component of any business, regardless of its age. Before you start to operate a new business, you should be aware of the debt collection myths that might poison your mind later. You must dispel these myths to keep your debt collection practices going on efficiently and effectively:
You Will Lose Customers when You Collect Debts
When you do business, it is appropriate to collect a debt through letters, phone calls, or emails. Inform the individual through email or letter on the day the debt is past due. Then, follow up with periodic phone calls and emails to remind them of the number of days they are past due. Make sure to document every step of the process as you can use it when you hire New York collection lawyers. There is nothing wrong with collecting on a debt when you do it professionally and legally.
A Small Business Should Not Use Professional Debt Collection
No matter the amount of the debt and the size of your company, you can consider professional debt collection to recover debts in a timely way. Sure, there is a cost to bringing in an attorney but this cost won’t be as significant as the cost of not collecting it completely.
You Must Collect the Debt Yourself
Collecting debt yourself for a period of time is prudent. But, after several failed attempts, you want to turn the task over to a collection attorney. You can try it for 90 days to resolve the situation, but, if your payment requests remain unanswered, then you should let the professional handle it for you.
The Fair Debt Collection Practices Act governs debt collection. The Act has guidelines for contacting debtors. For instance, you can’t contact a debtor at work or before 8 am or after 9 pm. If you let an attorney collect debts for you, you don’t have to worry about violating the law. Debt collection lawyers have procedures including wage garnishments, bank levies, and property foreclosures that can be used to collect unpaid debts.