If you’re in charge of collecting debts for your business, you may be facing a tough challenge. Debt collection can be stressful and difficult, especially if the debtor is being uncooperative or has financial problems. However, there are several steps you can take to ensure that your collection efforts are legally sound:
What to Do Before You Collect
- Determine if the debtor has the ability to pay. If they don’t have enough money, it’s unlikely that you’ll be able to collect on your debt.
- Determine if the debtor is willing to pay and work out a payment plan with them if necessary. If they aren’t willing, then there’s nothing more you can do except move on and try again with another debtor who is more amenable.
- Determine whether there are any other debts that should be paid off first before paying yours–for example, if someone owes $1,000 for rent but also owes $500 in credit card bills and has no money left over after paying those monthly payments (which would include yours), then it may not make sense for them to use their limited funds towards paying off their debt with another creditor like yourself when those other obligations need attention first before anything else gets taken care of.”
Determine whether to hire a lawyer or debt collector.
If you’re thinking of collecting your own debt, it’s important to know the legal steps involved. If you’re looking to hire a third party collector, there are some things that can help ensure they’re doing their job legally.
When deciding whether to hire a lawyer or debt collector, consider:
- What kind of debt are we talking about? If it’s not too large and the person who owes it isn’t contesting ownership (for example, if they admit he owes them), then hiring an attorney may be unnecessary and cost-prohibitive compared with going directly with a collection agency or other third party collector who specializes in this field.
- How much time do I have before my statute of limitations expires? Statutes of limitations vary from state to state; check yours here so that if there is one looming over your head when trying collect on an old account, it doesn’t become useless once passed due date arrives.*
Collecting your debt yourself may be cheaper than hiring a debt collector.
You can collect your own debt, but it may be more difficult than you think.
You’ll need to know the debtor’s address and name, as well as proof of the debt.
In addition to these basics, you will also need to have an idea of how much money is owed in order to make sure that you’re collecting enough (or too little) money from each debtor.
Send copies of the summons and complaint via certified mail, return receipt requested, or by first-class mail and request a return receipt signed by the person who received it.
If you send it via certified mail and pay for postage, you will need to provide proof that you sent the documents in this manner with your affidavit.
Prepare for trial, if necessary.
- Review the facts and evidence. The more familiar you are with them, the more prepared you’ll be in court.
- Create a list of witnesses and their testimony. You may need to call some of these people as witnesses during trial, so it’s important to know what they will say in court if necessary.
- Review your evidence and make sure it is admissible (meaning that it can be used by judges). For example: If someone gave you something valuable as collateral for their debt repayment but then refused to pay back the loan after receiving that item from you, this would be considered “collateral” evidence because it shows how much money was owed by each party involved in this transaction–and therefore how much money should go towards repaying debts owed by each party involved in this transaction (i.,e., yourself). However
Monitor all deadlines throughout the collection process.
- Keep track of all deadlines.
- If the debtor misses a deadline, you can use this to your advantage.
- If the debtor fails to respond or comply with court orders, they may be held in contempt of court and possibly jailed until they do so (if it’s not just ignored).
Collecting debts is not always easy and can often be emotionally difficult for both sides.
Debt collectors have to deal with angry or upset people who may not be willing to pay their debts, while those receiving collection calls are often stressed out by the situation.
If you have decided to collect your own debt, it’s important to keep in mind that you may need legal help if things become complicated or contentious. It’s also important to monitor all deadlines throughout the collection process so that none of them get missed accidentally!