Just about everyone loves to receive some kind of credit offer, and will happily use that credit. Most people will even pay back this credit without too much trouble or complaint. There are those troublesome few that simply have a hard time repaying their debts. Collecting on past debts is an unfortunate aspect of life for most businesses. However, if you don't go about it the right way, not only can you not receive your money, you may end up in legal trouble. Here are a few guidelines that you can use to ensure that you get what you are owed.
- Become familiar with local laws. As with most things in life, there are laws that affect what you can and cannot do when attempting to collect on a past debt. If you are not intimately familiar with these laws you can easily cross a legal line that will make it difficult for you to receive the money that you are owed. For example, in some cities it is against the law to contact a person who owes you money at work, but it is ok to visit their home in person and ask them for it. Before you even begin extending credit to anyone, or attempt to collect past due accounts, make sure that you know the laws for your particular area.
- Review the account. When you think that you have a past due account, make sure that you double check the invoices that you sent, and for any payments that you have received. Usually invoices will say that payment needs to be made within 30 to 90 days or additional interest may be applied. This information will help you know not only what was originally owed, but also how much interest needs to be attached to what is owed.
- Keep meticulous records. In conjunction to reviewing the account, make sure that you are keeping your records perfectly. Every attempt to contact the debtor, every payment received, every communication that you have with the client needs to be kept track of. Not only will this allow you to know where the account stands, but if your debtor has any questions or disputes the charges, you can give proper evidence to show what is going on. Furthermore, this will also protect you in the event that a debtor tries to claim harassment on your part.
- Don't be afraid to hire an expert. If you are unsure, or uneasy, in collecting on an old debt yourself, don't be afraid to hire an expert. Before you do though, make sure that you attempt to contact the customer three times yourself, before turning the account over to a collections agency.
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