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Credit
Agreements and Policy
Keys to collecting debt legally and
successfully include having powerful attorneys prepare a policy and
procedure manual and a credit application form. Do it through
membership...
inexpensively.
Attempting to Collect a Debt
A well planned strategy to debt collection
is better in the long run than immediately going to a collection
agency or court.
Consumer
credit laws affect preliminary debt collection methods, while
the
Truth-in-Lending
Act regulates the amount of interest that can be charged
on overdue payments. In addition, it may help to have your
provider
attorneys assist you in developing debt collection letters
instead of composing your own.
Beware that Your Customer has
Bankruptcy Protection
Your debtor has an "automatic
stay" benefit immediately upon filing a bankruptcy
petition. This will stop you from taking any further action to try
to collect the debt unless or until the bankruptcy court decides to
the contrary. Quick! Get knowledge of your options.
Memberships
are month-to-month... no long term commitment.
Interest on Overdue Payments
may be subject to state usury laws
Interest charged on late payments might be
limited Discuss with your
attorney
your options if the maximum amount of interest is
exceeded, the debt may be forfeited and a penalty assessed. In
addition, interest on overdue payments must be written clearly and
conspicuously. You'll want to avoid violation of the
Truth-in-Lending Act.
Before Hiring a Collection Agency
Contact
your provider attorney before hiring a collection agency to
pursue your debtors. Let let them "do their thing
first" to save you time and money. Part of their
strategy might be to include an effective licensed and bonded
collect agency. It's always best to have strong legal
council. A collection agency must operate under the Fair Debt
Collection Practices Act, and it's also important that they haven't
had any grievances filed against them.
Obtain Muscle When Collecting Money
Judgments
Have
legal advice if a money judgment is awarded to you in court,
further action may still be needed to receive payment. Such action
may include contacting the defendant, or in worse cases, providing
information about the defendant to a law enforcement officer so that
they can assist you in collecting the debt.
Mechanic's Liens
Discuss
with your provider attorney this tactic: If you where
hired to make property improvements , but then are not paid for work
completed, may file for a lien against the property. Should the debt
remain unpaid, you may have the right to collect it by a foreclosure
sale of the property.
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