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Question
Dear Michelle,
Our company has a serious collections challenge which I am trying to solve. It is owed about $50,000 from about 15 companies we have judgments against, all of which are within a 20 mile radius of our headquarers, another $10,000 from 5 companies that we've not yet taken to court, and about $30,000 from 40 companies that are paying late. We are working on the 40 companies that are late payers, but have referred the other two categories to an out of state collections agency. I feel that we could make progress by hiring an in-person collector to visit the accounts that total about $60,000 (judgment cases and 90 day plus accounts). I feel this way because, in the past, in person collection has proven successful-- I used to do it myself when I started the company and I was prepared to negotiate and did. My energies are needed elsewhere now as we are growing-- but this "old debt" could be used to pay off debt we owe and so I'm very much considering hiring a person to go in person to collect-- where is the best place to find a person like this, and how do you recommend structuring compensation and expectations?
Thanks,
Chris
Make sure if and when you hire someone to do your collections they are familiar with the fair debt collections practices act as well as the laws in the states you are trying to collect, also since you are owed such large sums of money, make sure they have collection experience. You can look online or in the paper or use a temp. service to hire someone.
If you have judgments already, I would enforce them now. That will get you some money within the next few months. If they have not paid, go back to the courthouse and file for periodic payments, you will be given a court date and the debtor and you will have to show up and the debtor will have to explain tot he judge why they have no paid you and if they give an excuse, they have to have proof of it. Once this is done the judge will decide if they can pay you and how much and when, they will issue a court order for their decision and give the debtor 30 days to pay. If the debtor does not pay you within the time frame, go back to the court and file a Contempt of court form. The debtor will be arrested for violating a court order and will be released when they pay you.
In person collections is the most successful way to collect, next on the list is phone calls and the least effective is letters. The most important thing you can do is follow up and stay on top of these people.
Good luck!
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Answers by Expert:
Michelle Dunn
Expertise
As one of the Top 5 Women in Collections, one of the Top 50 Collection Professionals, and winner of the Business Excellence award, I can answer any questions about debt, debt collection, improving business credit, creating a credit policy, enforcing a credit policy and collecting on past due accounts. I can also answer questions in regards to starting a debt collection agency since I have been a bill collector for over 24 years, started and ran my own collection agency for 8 years, and maintain my 12 year old Credit & Collections Association for members of the credit & debt collection industry. I am also the author of the popular and award winning book "Starting a Collection Agency, how to make money collecting money" now on it's 3rd edition. This book has won a the Writers Digest self published award as well as the New York Book Festival Award. I am a repeat contributor to the Wall Street Journal, and have been featured on NPR, CNN, as well as many other national radio and television programs. I have also been featured in national publications such as the Wall Street Journal, Forbes, Smart Money, MSNBC and much more. I have 17 published books to my name and am an accomplished speaker and consultant. I currently write 9 columns for newspapers, magazines and online portals worldwide.
Experience
I have over 24 years experience in debt collection, I started and ran my own collection agency for 8 years and I am the founder & owner of my Credit & Collections Association that I founded in 1998. www.credit-and-collections.com
Organizations
My Credit & Collections Association, I was also a member of the American Collectors Association and Plymouth Chamber of Commerce for 11 years. I am a member of many writing groups as well as my local Women Inspiring Women chapter. I am a member of Know More Media as an expert for their blog on business credit.
Publications
Business NH Magazine, Smart Money Magazine, MSNBC, CNN, Forbes.com, The Wall Street Journal, Home Business Magazine, Entrepreneur Magazine and website, many books, newspapers and television programs as well.
Education/Credentials
I have written 17 books in my collecting money series and one for Entrepreneur Press called the Ultimate Credit and Collections Handbook. My newest book is being published by John Wiley & Sons in May titled, The Guide to Getting Paid, how to weed out bad paying customers, collect on past due balances and avoid bad debt. This book is also being sold to many colleges as a text book.
Awards and Honors
My book Starting a Collection Agency, how to make money collecting money won an award from Writers Digest and the 2007 New York Book Festival in the "How to" category. I have won 2 awards from Dun & Bradstreet and Governor Jean Shaheen. I was nominated as one of the Top 5 Women in Collections twice as well as having been selected as one of Collection Advisor's Top 50 Collection Professionals by my peers.
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