How To Hire a Debt Collection Agency For Unpaid Invoices

As a business, maintaining a healthy cash flow is vital for the growth and success of your business. Providing exceptional services or products is only half the battle and ensuring you receive timely payments is equally important.

In this post, we will cover the following areas, walk you through the full recovery process and provide you with actionable takeaways.

1. Over 60 Days Past Due
2. Charged-Off Status
3. Obtaining a Judgment
4. Post-Judgment Remedies
5. Hiring a Debt Collection Agency

Over 60 Days Past Due

When an invoice becomes more than 60 days past due, it’s time to take a more proactive approach to debt collection:

• Review the invoice: Sometimes, a simple error could be the reason for non-payment. Review the invoice details, such as the amount, due date, and the individual’s contact information to ensure the information is correct.
• Communicate with the individual: Reach out to the individual via phone or email to discuss the outstanding invoice. The individual may be experiencing financial difficulties or have overlooked the due date of the payment.
• Form a demand letter: If the individual remains unresponsive or unwilling to pay, send a formal demand letter. This document should be retained, as it may serve as written documentation for future reference.

If these steps don’t yield results, consider engaging a collection agency like InvestiNet to assist you in recovering the unpaid invoice.

Charged-Off Status

Charging off a debt is when a business considers an amount owed uncollectible by traditional means. A debt reaches this status after a period of time or when a business otherwise believes that the payment will not be received. Understanding the implications of charged-off debts is crucial for small and medium-sized businesses in maintaining a healthy cash flow.

1. Financial statement impact: Monitor your financial statements to assess the impact of charged-off debts on your business’s financial health.
2. Tax liabilities: Consult a tax professional to explore potential tax implications of charged-off debts and accurately report them in your tax filings.
3. Collection efforts: Consider partnering with a reputable debt collection agency to increase your chances of recovering charged-off debts.

By proactively managing charged-off debts, small and medium-sized businesses can mitigate their impact and maintain a healthy cash flow.

Obtaining a Judgment

If you have still not received payment, legal action may be warranted. Hiring a law firm which specializes in debt collection may assist with your chances of success in a legal proceeding for unpaid invoices. Obtaining a judgment for an unpaid invoice generally involves the following steps:

1. Verifying the debt: A review by your attorney to ensure the debt is verified and that required supporting documentation is available and accurate.
2. File a lawsuit: If step 1 above is sufficiently met, the attorney may submit a complaint to the court on your behalf, detailing the unpaid debt and provide any required supporting documentation.
3. Serve the individual: The individual owing the balance must be properly notified of the lawsuit through service of a summons and a copy of the complaint.
4. Present your case: Your attorney will represent your business during the court hearing, presenting the evidence to the judge and arguing in favor of a judgment for the outstanding amount.

Winning the case may result in a settlement or a judgment in your favor, legally obligating the individual to pay the outstanding amount. Debt collection laws and regulations will very depending on the applicable state and location as well as your business. This is not legal advice. For legal advice, please consult with an attorney licensed in the applicable jurisdiction.

Post-Judgment Remedies

With a judgment in hand, you can explore several avenues to enforce it and recover your money. Here are a couple of common methods to collect on your judgment:

• Asset Levies: Legally seize the individual’s property, such as bank accounts or real estate, to cover the outstanding debt. Asset levies are subject to state laws, and some states may have exemptions that protect certain assets from seizure.
• Wage Garnishments: Obtain a court order to withhold a portion of the individual’s wages until the debt is paid in full. Wage garnishment laws vary by state, and there may specific caveats for your area.

Each enforcement method has its own rules and regulations, so carefully consider which option is most suitable for your situation.

Hiring a Debt Collection Agency

Navigating the debt collection process can be overwhelming and time-consuming. Partnering with a licensed and experienced debt collection agency like InvestiNet can significantly improve your chances of recovering your unpaid invoices while minimizing the burden on your business.

Before hiring a debt collection agency, consider the following factors:

• Licensing and accreditation: Ensure the agency is licensed to operate in the relevant cities, states and municipalities. Check for any accreditations, such as the Better Business Bureau (BBB) rating, as a sign of their professionalism and commitment to ethical practices.
• Experience and expertise: Look for an agency with a proven track record of successful collections in your industry. This demonstrates their understanding of the specific nuances and regulations associated with your business sector.
• Fees and pricing structure: Compare different agencies’ fee structures, which can range from flat fees to contingency-based pricing. Determine which model best aligns with your budget and recovery goals.
• Communication and reporting: Choose an agency that prioritizes transparent communication and provides regular updates on the progress of your collections.

Our team of experienced professionals can assist you in every aspect of the asset recovery process, including:

1. Pre-Collection Efforts: InvestiNet can help you develop effective strategies to prevent unpaid invoices from escalating to collections.
2. Legal Action & Judgment Enforcement: InvestiNet’s legal team can guide you through the process of obtaining a judgment and enforcing it through asset levies or wage garnishments, as permitted by law.
3. Nationwide Coverage: With a nationwide presence, InvestiNet can help you recover your unpaid invoices no matter where the individual owing the balance resides.
4. Reputation and Compliance Adherence: InvestiNet stays up-to-date with the latest debt collection laws and regulations, ensuring that their collection practices are ethical and compliant.

In summary, unpaid invoices can significantly impact your business’s financial health, but you don’t have to face this challenge alone. By understanding the different stages of the recovery process and partnering with a trusted debt collection agency like InvestiNet, you can recover your money and focus on growing your business.