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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Debt Collection Agencies versus Lawyers

Debt collectors get paid when they collect money for the client and only when they collect. They will usually work hard in negotiating with the debtor and attempt to reach a settlement before resorting to any legal action. Agencies work fast and phone at odd hours and will try anything legal to collect the outstanding amount. A substantial amount of attention will be spent on whether it is possible to collect the debt and in certain cases determine whether the debtor has any available assets, if necessary.

Debt collection agencies have a broader range of tactics they use to collect debts. Where required they are usually have expertise to find the missing debtor.  If a lawyer is appointed first, you will need to pay for the legal service, as well as paying a commission to the debt collection agency hired to finish the job. Agencies can be extremely effective against ‘professional debtors’ and tracing missing persons.  They have a keen interest in collecting the debt and in all processes related to it.

Lawyers, on the other hand, get paid as they go for each step of the legal process regardless of whether it produces payment or not. This is a paid service irrespective of the results. Lawyers get stuck right into the legal process with minimal negotiations, if any, and may work fast, but for some reason rarely give that impression. The only pressure on the debtor is to have the matter pursued in the courts and their efforts might appear sluggish. Little or no attempt will be made to establish whether the debtor has any other assets to settle the debt.  Often all the processes will be explained using jargon, or not explained at all, and they are not effective against ‘professional debtors’ as locating debtors is not their business. You can trace a skipped debtor using a debt collection agency.

Many organizations would opt for a debt collection service initially depending on how unemotional or selective you want this process to be.  Lawyers used to be used as a “shock tactic” when they are asked to send the debtor a letter of demand. The idea would be to startle the debtor into paying.  This works, but today the best debt collection agencies retain solicitors and send solicitors letters of demand themselves, achieving the same result often for no extra charge.

Benefits of Using Services of a Debt Collection Agency

If you look at an Annual Accounts Statement there is likely to be a column Every company, small, medium or big that is in the financial sector always has ‘receivables’ in the form of dues owed by customers. denoting ‘bad debts’ or ‘provision for bad debts’. Some of these amounts may be recovered, some not at all, or through long-winding legal procedures that can stretch through many years. The international accounting firm Pricewaterhouse Coopers (PwC) estimated that in the mid 2000s, external collection agencies recovered debts to the tune of $30 billion annually. This is a whopping amount!

In such cases, Sydney companies may either deal with outstanding receivables through internal mechanisms or outsource the collection of such amounts owed, to external debt collection agencies in Sydney. These are third-party commercial collection agencies contracted by the company to use the skills and resources that the agency has in recovering the amounts due. Such an agency is called a Debt Collection Agency. These agencies are governed by the regulations of the Fair Trade Debt Collection Practices Act and so they have the knowledge and the expertise of the do’s and don’ts associated with the collection of debts.

There are many benefits accruing from using a Debt Collection Agency, among these are:

• The internal accounts department of a company is usually responsible for collecting amounts due to the company; however, ‘aged receivables’ as long-standing debts are referred to require a lot of time, skill and dedicated effort which may require intensive training. Since delays can cost the company extensively, a third-party service or Sydney debt collector is fine-tuned to handle this job exclusively and therefore able to recover money that might otherwise end up not being recovered at all.

• Sales teams in companies that are owed amounts by clients are sometimes not paid their commissions or incentives if monies are outstanding from customers. This forces sales people to spend a great deal of time working to recover the money rather than doing actual sales calls or sales generation for future revenues. This greatly impacts the revenues of a business.