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Legal Debt Collection For Local Businesses
by: Joel Walsh
If a customer owes your local business money, it's hard not to feel angry, like you want to do anything possible to get your money back. But the days of going all out to collect on a debt over.

The Fair Debt Collection Practices Act, designed to protect consumers from harassment or intimidation, sets firm limits on what you can do to collect a debt from a consumer. The federal debt collections law even prohibits practices that were once standard, and that you might not consider harassment at all.

Besides, as a local business, you have an even more powerful reason to be especially careful about legal debt collection issues. You have something much more valuable at stake than a lawsuit: your business's reputation in the community.

Legal Debt Collection Best Practices

There are plenty of articles on the web that lay out in plain English what the Fair Debt Collections Practices Act says you can and cannot do. For instance, this article: [link to small business debt collection law cheat sheet] Just to give you some idea of the law's requirements, here are some of the biggest:

1. No telling any third party about the debt (except collection bureaus, collection agencies, or the debtor's attorney).

2. No calling on the telephone 9 pm - 8 am, or calling repeatedly in a way that is annoying.

3. No postcards or envelopes that mention the debt.

4. No threats to take actions you cannot or will not really take, such as seizing property, in the case of an unsecured debt.

5. No misrepresenting yourself (e.g., "Hi! This is the Publisher's Clearinghouse Sweepstakes. May I speak to John?").

6. No paying down the debt with payments the customer has directed be applied to other debts

Tips and Tricks for Legal Debt Collections

With all these limits on what you can do to collect a debt, what can you do legally?

1. Speak with the debtor personally on the telephone; most likely he or she wants to pay but is in over his or her head. Begin by asking what circumstance has kept him or her from paying. Offer to set up a repayment plan.

2. You should both send letters and make telephone calls. Many people will only respond to one or the other.

3. Document every part of the collections process. Take notes for each call and keep a copy of each letter. If the debt does ever go to court, you will have proof you acted legally.

4. Look into reporting the debt to credit bureaus. If you can, and are willing to do it, you can tell the debtor that not paying will impact his credit rating.

5. Best tip of all: hand over the job to a dedicated collection agency. Small business debt collection services start at as little as $20 per debt.

The fight to get paid is a fight no business should have to involve itself in. Unfortunately, debt collections are a part of business. Just make sure that for your local business debt collection law is followed to the letter, or legal proceedings may become part of your business, too.

About the author:
Joel Walsh has written more tips on debt collection law: http://www.debt-collection-laws.com/?debt collection law [Web publication requirement: create live link for the URL/web address using "debt collection law" as visible link text/anchor text; EXCEPT if redistributing (article bank, aggregator, or clearinghouse), anchor text optional.]


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Debt Relief

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 Debt Relief From Debt Consolidation
 by: Jakob Jelling

If you are up to your neck in debt, there may seem like there is no relief in sight. In fact this is not necessarily the truth. There are ways to take all of your stifling bills and roll them up into one neat package by using debt consolidation in two very popular forms Home Equity Loans, Refinancing Loans, and a Consolidation Credit Card. All of these instruments provide the debtor with one thing “relief” from the current debt by shrinking it down to a single manageable debt.

Using home equity to consolidate debts

One of the popular methods of debt consolidation today is the Home Equity Loan. What happens is that the debt is extinguished using the equity from a homeowner’s home. A loan is created outside of the mortgage in order to satisfy the debts. Should the homeowner default on the loan, their house is in jeopardy of being foreclosed upon if that loan is not satisfied with a specified amount of time.

Refinancing loans

People often consume the debt by rolling it into a new mortgage. This way the house costs more money to the borrower, but the debt is extinguished at close and the debt is neatly rolled away into the mortgage securely. Upon settlement of the loan, the debts are paid in full and satisfied. The clock on the mortgage is reset to day one.

Credit card consolidation

A low interest credit card is offered to the borrower to include any outstanding credit and loan balances. The interest rate is a low fixed rate for a period of up to one year, upon the year’s end it will resume at its normal rate. Upon acceptance and terms the account should be closed once paid in full and payments be made directly to the new credit card provider. Some people have been able to master paying off one credit card with another to keep the debt revolving and interest rates low. Some people fail to close out the previous creditors account and run them back up again as well.

All three of these options provide solid relief for the debt and help them reconstruct and manage their debt better.

By Jakob Jelling
http://www.cashbazar.com


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