When should you hire a debt collector for your small business?
Having debt that is owed to your small business is never fun. It can take money out of your pockets, it can make it hard to trust new customers, and it can create budgeting shortfalls. When your small business is owed money, it can be a hard time all around. Knowing when to hire a Houston commercial debt collection lawyer can make all the difference.
What is a Commercial Debt Collector?
A commercial debt collector is a collection agency that specializes in the collection of debts on behalf of another business. Commercial collectors are not the same as consumer collectors as they are more often focused on collecting debts that are owed from one business to another. This can be things like companies that ordered supplies but never paid, companies that ordered a completed product but haven’t paid, or those companies that have a significant outstanding debt to another business.
The major difference between a commercial and consumer collector are the people that are being pursued. They are not going to be going after one person in most cases, they are going to be going against larger companies that have not paid their bills.
How do Debt Collectors Work?
Debt collectors work on the principle that the business that is owed money is going to have gone through a collection process on their own but have not been able to get the money back. The business that is owed the money will attempt to collect their debt from the debtor and if they are not able to collect, they can then hire a debt collection agency that will work on their behalf to help work to collect the debt.
If they are unsuccessful in collecting the debt on their own, they can hire a debt collection agency that will help them to collect their money. These agencies work in a few ways. First, they can buy the debt from the original company for less that it is worth then can work to get back some the money from the individual company.
If they purchase the debt, they are going to be buying it for less than it is worth so that the person or business that is owed the debt can be done with it. They may need to take a small loss, but a small loss is better than the huge loss of an entire debt. Another option is that the debt collection agency is going to work with the company that is owed, and they will take a portion of the debt once it is collected.
Most debt collection agencies will work to do a few different things to collect the debt. First, they can offer the debtor a settlement for slightly less than what they owe to help you to get the money back and to ensure that you are not out a ton of money. This tactic is to offer the debtor a chance to pay for a little less so that everyone can be happy with the outcome.
When you do hire a debt collection agency, you need to take the time to really determine if it is going to work for you or if there is another option that is going to be better overall. Even though you are no longer the face of the debt, you are going to be listed as having been the company that sold the debt or that did contact the debt collector.
When to Hire a Debt Collector
There are a few different factors that go into the process of choosing to hire a debt collector. The first factor that you might want to consider is if you are not able to reach the debtor. If you have tried to reach the debtor, and you are not able to, you might want to contact a debt collector. Debt collectors have the ability to track people down a bit more, and they may have the ability to find someone that you are not able to on your own. They also have the time to dedicate to finding that person or that company.
Another factor you might consider is that the debt is past due by at least 90 days. This means that they have willfully been avoiding and ignoring the debt to the point that it has been very past due and that you have sent multiple notices stating that it is past due. If the debt is even further past 90 days due, this is going to cause you trouble and is going to make it even harder to collect.
You may also want to collect a debt collection agency if the checks have bounced or if they have promised that they are going to pay, but they have not done so. If you are dealing with a customer that is simply doing whatever they can to avoid the debt and to avoid paying the debt. You may want to contact a collector if you are dealing with a customer that is very difficult or that is making the process harder than it needs to be.
You are entitled to pay for the things that you do and for the products that you make. If you are owed money ad you are very far behind or the debt is very old, you may not be able to collect on your own. Sometimes when you do contact a collection agency, that is the push that people need to realize that the debt is real and that they do have to pay it and that you are not going to back down.
When to Hire a Lawyer?
There are some cases in which not even a debt collector is going to be enough to recover the debt that you are owed. In these cases, you may need to hire a lawyer to help sue for the debt that you are owed and work to get more money and to get the debt paid to you. It is definitely important to remember that no matter what, you are entitled to payment, and you are entitled to compensation for the things that you do.
If you are dealing with a particularly nasty customer or one that is doing all that they can to discourage you and to prevent you from getting your payment, a lawyer might be your next best bet. They can help you do a few things starting with proving that the person owes you money, that they have gone out of their way to avoid paying their debt.
Debts are something that does need to be paid and if you have an outstanding debt that is making it harder to function and to run your business. If you do have a customer or multiple customers that are not paying you and that are not making an effort to settle their debts, you may want to look into a debt collection agency that can help.
If you have hired a collection agency, and they are not able to collect the debt, this might be the right time to talk with a lawyer about what you can do and about what your claim is and what you might be able to recover. Of course, when you do hire a lawyer or when you hire a debt collection agency, you are going to lose some of the debt, and you are not going to be able to get the full amount you are owed back.
Of course, some debt back is better than nothing. If you are owed a great deal of debt you are going to be able to recover some of it, and you are going to be able to get that money and put it back into your business and back into growing your business. It would be fantastic if we could totally avoid customers that do not pay, but the truth is that there are always going to be those customers that try to get out of paying what they owe.
With a small business, this is especially detrimental and can make a big difference in your overall operations and how your company works and flourishes. Collecting debt can be hard, it can be trying, and it can be consuming and can take a great deal of money out of your pockets. The right collector is great, the right lawyer can help as well.