When Should You Hire A Collections Firm?

Every business owner aims to make high profits. However, at times this objective is affected when customers refuse to pay their bills on time. You may even face a situation in which the debtor does not clear their dues at all.

Unpaid invoices can be collected in many ways. For instance, you can give one of your employees the task of collecting the debt. Besides that, you can consider hiring a debt collections agency.

However, the best way to collect a debt is by hiring a debt collection attorney. Debt collection lawyers can help accelerate the process of getting back your money. The best part is that they don’t charge a percentage of debt as their fee, unlike an agency.

The Right Time To Hire A Collections Firm

Here are the top cases in which you should hire a collections firm or a debt collection attorney:

  1. Lack Of Employees

All businesses have a different number of employees, and their workload varies significantly. This is a factor that you should consider when hiring a collections firm.

If your company lacks in-house personnel for collecting the debt yourself, then it is the right time to hire a debt collection attorney. You can also seek help from a firm. This is because their only purpose is to get you what you are owed. So they have the right staff for it.

  • Debt Amount Is High

The debt that a customer owes can vary from a few dollars to thousands of dollars. In some cases, you will find it best to let go of the debt. That is because repayment would cause you to spend more than the owed amount.

However, there will be cases when the amount is too high to let go. For example, a client may refuse to pay a bill of $1000 or more. In such situations, you should hire a collections firm.

  • Customer Is Not Responding

It is the responsibility of every business to remind customers of the debt before the final payment day. You can do this by calling them or emailing them. When the due date passes, you should send a demand letter to the customer’s address.

Once you have done these things and the customer still doesn’t respond, it’s time to hire a collections firm. Their debt collection attorney will file a motion to show the client how serious you are about the payment.

  • Sixty Days Have Passed

Each business has a different policy regarding the debt due date. Some companies extend it by thirty days. Meanwhile, others give a window of ninety days before taking serious action.

The best range to provide is from sixty to ninety days. Once this limit has passed, you should hire a debt collection attorney. This is to ensure that client pays the money back promptly. After all, if you take them to court, they will have to pay more than the original debt.

  • Customer’s Check Have Been Rejected

Many customers pay their bills by checks. While most of them pass, some of them bounce as well. The client may have given you the check, but you cannot rely on them entirely.

If a client gives you a check and it bounces, you should hire a collections firm or individual debt collection attorney. This is because the customer may not be intending to pay.

A lot of people stall by deliberately giving checks that will bounce. This gives them a window to escape the town without paying.

  • Your Cash Flow Is Affected

This case is popular for many small businesses. If you are a company in its early stages, you will be highly dependent on bill payments. So, if a client does not pay their dues, your cash flow will suffer.

Besides that, if you are a small business, it is best not to extend the date. The best course of action for you would be to hire a debt collection attorney. They can send a demand letter on your behalf to ensure that the customer pays without having to go to court.

Final Words

That was your complete guide to when should you hire a collections firm. If your debtor is based in Texas, we suggest you opt for Darrell W. Cook & Associates. They have the best debt collection attorneys to help your business.

The best part about hiring Darrell W. Cook & Associates is that they always ensure debt payment. Additionally, they handle all the paperwork for you. So all you have to do is sit back and relax while the attorneys get you your money.

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Jennifer Alex

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