Business Debt Collection
A company is not likely to stay in business for very long if it doesn't bring in revenue. Yet given the weak state of the economy over the past decade, companies have increasingly had difficulty in getting paid for their goods and services. A business attorney in Conroe can help you develop strategies for collecting debts that are effective and reduce the risk of damaging business relationships.
Challenges for Business Debt Collection
Many people and businesses are facing economic difficulties. Your business wants to maintain good relations with those who purchase the goods you sell; indeed, you may have customers and suppliers with whom you have enjoyed a long and fruitful history of doing business. If one begins faltering on payments, it is useful to begin by a friendly inquiry into the matter.
Delinquent debtors fall into three main categories:
• Those who, from the beginning, have no intention of ever paying the debt • Those who tend to put off payment for as long as possible, or juggle payments • Those who, because they are facing financial difficulties, cannot pay on time even though they would like to do so
Your business attorney in Conroe will help you discern which category a given debtor likely falls under; this is important because each type of debtor needs to be handled somewhat differently.
Some Strategies for Collecting Debts
Customers who never planned to pay are often hopeless causes, meaning that it will take serious action to get them to pay their outstanding bills. This may involve sending demand letters, and then turning the matter over to a collections agency. For customers in the other two categories, however, it is worth your while to communicate with them about the matter and try to agree upon a solution. You may consider extending the deadline for payment, offer/reduce monthly payments, or, if all else fails, offer to allow the debtor to make partial payment in lieu of the entire debt.
Regardless of how you proceed, it is important to get on top of the matter quickly, and continue until you have been paid. It is unwise to harass customers or get personal. You can write demand letters, and when all else fails, refer the debt to a collections agency. Keep in mind that these agencies generally charge a 50% fee for any money they collect.
Finally, make sure that you do not violate any of the provisions of the Fair Debt Collection Practices Act (FDCPA). You must identify yourself in every communication and explain that any information will be used in collecting the debt. You must also let the customer know that they have a legal right to dispute the debt.
For Legal Assistance with Your Debt Collection Needs
It is important to have in place a set of strategies for dealing with debt collection. A business attorney in Conroe at Peterson Law Group can assist you in this and other business law matters. Call 936-337-4681.