Collecting on Past Debts

by Lee Wyatt
(last updated August 23, 2013)

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.

Author Bio

Lee Wyatt

Contributor of numerous Tips.Net articles, Lee Wyatt is quickly becoming a regular "Jack of all trades." He is currently an independent contractor specializing in writing and editing. Contact him today for all of your writing and editing needs! Click here to contact. ...

MORE FROM LEE

Making Your Own Peanut Butter Cups

One of the best selling candy bars on the market right now is, without a doubt, Reese's Peanut Butter Cups. ...

Discover More

Perfect Pizza

Pizza is an enduring family favorite that can be purchased just about everywhere. While it is always easy to simply go ...

Discover More

Removing Permanent Marker

Permanent markers can be a great help when you are moving, coloring a poster for your child's school project, or simply ...

Discover More
More Money Tips

Understanding Consumer Debt

Consumer debt is a fast growing problem in America and can come on without realizing it if you're not looking out for it. ...

Discover More

Why Interest Matters

Debt is pretty much an accepted part of today's world and if you don't consider all the aspects of it, you'll be in ...

Discover More

Avoid Check Cashing Companies

Using check cashing companies can be a big financial mistake. They charge you for cashing your checks, but you can often ...

Discover More
Comments

If you would like to add an image to your comment (not an avatar, but an image to help in making the point of your comment), include the characters [{fig}] in your comment text. You’ll be prompted to upload your image when you submit the comment. Maximum image size is 6Mpixels. Images larger than 600px wide or 1000px tall will be reduced. Up to three images may be included in a comment. All images are subject to review. Commenting privileges may be curtailed if inappropriate images are posted.

What is 8 + 7?

There are currently no comments for this tip. (Be the first to leave your comment—just use the simple form above!)