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Small Business Debt Collections Law Trap
by: Joel Walsh
When someone owes your small business money, you certainly feel like a victim. But did you know that if you aren't careful, you could break the law by trying to get the money back?

How to Break a Federal Debt Collection Law

You have a small business, and your bills are coming due soon. You could easily pay those bills if a few thousands dollars of overdue invoices were paid. It's time to give your clients a few friendly reminders…

1. You call up the biggest debtor at his home number. The debtor's girlfriend answers and you leave the message that you were just calling to remind her husband about the invoice you had sent last month.

2. You get into an argument over the phone with the next debtor. In the heat of the moment, you say you're referring the debt to you attorney--when in reality, you know you can't afford to do that.

3. It's getting late--in fact, it's already after 9pm. But you know that debtor number 3 tends to stay up quite late, so it's practically midday for him. So, you cheerfully give him a call and remind him about the invoice of a couple of months ago.

Congratulations, you may have just broken a federal law three separate times. Plus, you could be sued for it.

Collections Laws Finer Points

Have you figured out what collections law you broke yet? It's the Fair Debt Collections Practice Act (FDCPA), the federal law for collections. Meant to protect consumers from harassment, it has a clear list of things you can't do. Let's look at what you did wrong in the last example:

1. Never tell someone other than the debtor that you are calling about a bill. You can, of course, leave a message that you called. You can even call someone simply to find out if they know if a hard-to-reach debtor has moved house. But you cannot under any circumstances let on that they owe money. Simply leave your name and phone number as with any other "call me back" telephone message.

2. Never claim to be involving an attorney when you are not. Of course, this might seem like a soft area of the law, since intentions are fuzzy. But, for instance, if it's clear that suing to recover the debt would cost as much as the debt itself, your bluff will be obvious in retrospect. To be on the safe side, don't ever claim to have involved your lawyer.

3. Never call before 8 am or after 9 pm, unless you have the explicit permission of the debtor. But unless that permission is in writing, you're safer not calling during those hours, anyway.

Unfortunately, not every aspect of the law is as straightforward as this case. For instance, the law is only supposed to apply to consumer collections, not business collections. But with home business and telecommuting blurring the line between work and home, you're better off following the law's dictates in every case.

Plus, the law has numerous other protections for debtors--or traps for collectors, depending on your point of view.

Feeling daunted? Before you give up on ever seeing your money again, consider outsourcing your over-aged accounts receivables to a professional collections service. After all, there's no law saying you should let customers rob you.

Please note this article is not intended to give legal advice and may not be complete or up to date with the most current collection laws changes.

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


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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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