The Debt Business is Booming

It would seem that human instinct is to hide from collection agencies. We don’t answer the phone when they call and we fail to respond when they file suit against us. As natural as it seems, hiding from the problem is the worst way to deal with it. Responding to a lawsuit from a collection agency could be the fastest way to make it all go away.

This is a problem the industry created for itself and it’s doubted anyone will feel sorry for them. Just the same, let’s take a look at how debt collection in Australia has grown in recent years and how all the selling and trading of debt from one company to another can actually benefit the consumer.

Debts are typically sold or assigned to third party debt collectors when the original creditor feels the debt is no longer collectible. The original creditor is the party with whom the debtor receives an extension of credit or to whom the original debt is owed. These include credit card companies, banks, and mortgage companies. The original creditor sells the debt in portfolios or in bulk to third party collection agencies for around four cents on the dollar. The debt collection agency will then attempt to collect on the debt for the full amount allegedly owed to the original creditor.

The collection agency purchasing the debt generally acquires merely an electronic file containing the debtor’s name, account number, personal contact information, and any personal or professional references the collection agency may have utilized in their efforts to collect the debt through nsw debt collector.

However, what’s often not included in those files is essential information necessary to prove the debt is owed or providing the collection agency with “personal knowledge” of the account. Nonetheless, it is generally not purchased as part of the debt portfolio.

 

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Why You Should Enlist the Help of a Debt Recovery Service Today

As anyone who runs a business will know, collecting the money owed is easily one of the most challenging aspects of administration. One of the things you realize after going into business is that clients will always get away with what they can. The majority, of course, will pay up faithfully and on time every time, but there is always a percentage that will–for whatever reason–drag the chain when it comes to payment.

Often, it seems the exact same clients who were exceedingly demanding of your prompt responses during prior transactions. One way in which to take the stress, lost productivity and frustration out of chasing up invoices is to engage the help of an agency of debt collection Australia.

What Does a Debt Collection Agency Do?

In terms of managing outstanding accounts, a debt collection agency can provide holistic, big-picture solutions that take the worry, stress and administrative work out of chasing up funds owed to you. From early-intervention call services all the way through to (last resort) legal proceedings, a debt collection agency is your answer to staying on top of who owes what! Depending on the services you need most; you can set up a system whereby overdue invoices are immediately referred to your agency after a certain number of days.

Why Outsource?

Depending on the size of your company, chasing up overdue invoices can at the least be a gross misuse of valuable time and productivity, and at worst an entirely impossible undertaking. Debt collection agencies take all the guess-work out of the process, and instead of having to continually spend time and money with back and forth exchanges, it’s simply a matter of entrusting the right company to get you the payment you’re owed–often far more effectively than you ever thought possible.

Australian debt recovery services holds the added weight and threat of a bad credit rating–something nobody wants–so you’ll find that it is often a lot easier for an agent to get results faster. In addition to this, a debt collection service can cater payment plans for clients experiencing financial trouble and the added ‘middle man’ can take some of the heat out of situations.

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Type of Debts That Collection Agencies in Can Help With

As a business, debt is incurred by customers and clients, no matter what type of business it is. Almost every company will have uncollected debts and there is no way around that.

It’s like knowing that every steel car will rust. It goes with the territory. Debt collection agencies Sydney help businesses like yours get some of that money back and this article discusses some on the types of debts you can collect on.

Credit and Personal Loans

For those of you that loan money to customers for personal loans or issue a line of credit for purchases; debt collectors can help attempt to get some of that incurred debt back to you, while staying within the local rules, terms, and laws. This type of debt can include any amount of debt, whether it is $100 or $100,000.

Mortgages

If your line of business involves loaning funds to customers for purchasing homes or other real estate in the form of a mortgage, then collection agencies can help attempt to retrieve past due amounts. In some situations, a repayment plan may be established while other times it can go through court.

Auto Loans

If you are a local bank or financial institution and you loan out money to purchase vehicles, you can retrieve bad debt through repayment plans, payoff discounts, or vehicle repossession. Oftentimes, garnishment can be another option. In many cases, debt collectors can make every attempt to help you get back the money that is owed.

Medical Bills

Medical charges are a very common form of debt for most people, mainly because they incur to a high amount and health insurance does not cover everything and also usually requires a deductible. Besides that, it often sits on the backburner by the medical facilities for some time before action is taken. This debt can usually be recovered through Sydney debt collector.

Banking Debts

With this category, it is not referring to bank loans, but balances owed own overdrawn accounts. Most of the time, an account receives several overdrafts and the owner cannot pay the negative balance to keep the account active.

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What to Look For in a Local Government Debt Collection Agency

As a business, you will have or already have unpaid invoices, whether they were for a service or a product. Recovering amounts owed can be a long and bumpy road for your business, unless you hire a collection agency to handle everything for you, including keeping you legal. So what should you look for in a collection agency? Here are some details.

Avoid Headaches and Wasted Valuable Time

Hiring a second local government debt collection agency is perhaps the best decision you can make when it comes to collecting on old debts. You have other important business tasks to handle and doing the collecting yourself can consume a lot of your important time, and it’s not rational to continue using your primary debt collection agency to continue to chase old debts they haven’t collected previously.

One Size Fits All Does Not Apply

Every debt collection agency is different and some may have the offered services you need while others may not be tailored to your situation. Many go straight to legal action without contacting the debtor personally.  Some, such as Outstanding Collections Australia use personal contact extensively, and find that personal contact from a debt collection agency increases collection rates dramatically and incurs few if any legal fees.  Local government debt collection agencies that rely exclusively on legal action do a disservice to ratepayers and to councils.  Ratepayers who are struggling to pay rates bills will doubly struggle to pay expensive legal fees in addition to the rates – this results in a double negative for councils, loss of goodwill from ratepayers who believe council doesn’t care, plus an increase in Rates Outstanding levels for council as overdue rates accounts drag on much longer.

Types of Debt They Handle

Debt collectors focus on specific types of council debts, which means that you may need a couple of suppliers to get best results on your whole profile of bad debts. For instance, some focus solely on straightforward accounts, rushing through legal action and hoping for payment.  Others specialise in collecting through personal contact and collecting difficult debts, skip tracing long lost debtors etc.

Their Client Database

An important thing to consider when looking at hiring a debt collector is the type of clients they retain. Some collection agencies work with big corporations while others handle small business clients. Some handle both or are better with one or the other. Some work with franchises while others work with companies that provide services like home improvement companies and landscaping businesses.

Choosing a company with an extensive client base in local government, with diverse experience in city and country councils can be very helpful.

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