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Successful Debt Collection Processes
The Massachusetts debt collection industry is highly regulated and often unfairly based on the side of the debtor. These practices make it difficult for businesses to collect their rightful payment. Creditors often give up and take the loss rather than pursuing recovery of unpaid debts. Despite the challenges of debt collection in Massachusetts, there are some tried and true methods that have recovered millions in bad debt for creditors throughout the state.
In general, debt collection involves a twofold process. The first step is to locate a debtor. This may include researching databases, contracting with the United States Postal Service and subscribing to public records searching authorities. It is important to gather all the necessary information about a debtor and their current situation before pursuing the debt. The second step in debt collection is making contact with the debtor. After all the information about the debtor and the actual debt have been obtained and verified, the recovery process begins. There are two basic types of debtors, and contact methods will vary based on the individual or business that owes a debt.
Commercial Debt Collection Process
Any debt collection attorney in Boston will attest that commercial debt collection is one of the most challenging areas of financial recovery. There are successful ways to motivate commercial debtors to settle the matter amicably and pay the total amount owed. Struggling businesses are especially susceptible to the negative impact of a declining business credit score.
These businesses are trying to either establish or maintain their commercial credit. Boston small claims courts provide one method of relief for creditors to collect from commercial operations. Most businesses will make progress toward paying off their debt if they know they are facing legal action. Debt collection attorneys are able to persuade business owners to settle the debt rather than risk their reputation. More often than not, the threat of litigation is enough motivation for commercial debtors to begin making payments toward outstanding debts.
Personal Debt Collection Process
Recovery prospects for individual debtors are exceedingly more difficult than attempting to collect from commercial debtors. Although the debt amount is generally lower, the available incentives are also less effective. Depending on their personal financial situation, individual debtors may be unable or simply unwilling to pay their financial obligations. There are generally two ways to handle the collection of personal debt.
The first option is to reason with individual debtors, to make them aware of the debt and their obligation to pay. This method is most effective with individuals who faced a temporary financial hardship and were unable to make payment in full according to the original terms of the contract or agreement. Since these debtors were probably not intending to skip out on the outstanding balance, they usually need minimal coercion to reach a repayment agreement. On the other hand, debtors who simply have no intention of repaying a debt require a much more aggressive approach to debt collection.
Aggressive Collection Practices
Boston debt collection lawyers are adept at recovering bad debts for their clients. They utilize all the information available to conduct research and locate debtors who refuse to settle their debts. Locating a debtor is a cumbersome process but does not take long when experts from a Massachusetts debt collection firm are working the case. Along with finding the individual, effective debt collection firms must also determine their ability and likeliness to quickly settle the debt.
Debt collectors may access the debtor’s consumer credit report to determine the number of accounts that are currently in collection status. This information will provide clues as to the nature of their character and help determine next steps. Debt collection attorneys will also research bankruptcy applications to ensure the debtor has not recently filed a petition for liquidation of assets or restructuring of their debts. If it appears the debtor has at least some means of making payment and is not currently in bankruptcy status, a Massachusetts debt collection attorney will pursue additional legal recourse options.
Boston Collection of Judgments
One of the main reasons that companies hire a personal or commercial collection lawyer in Boston is to establish judgments. The process is very specific and can result in the failure to an inability to collect a debt if any part of the paperwork is inaccurate or missing. Debt collection attorneys work closely with process servers and clerks of the small claims court system to ensure their judgments are processed in good order.
A judgment secures the payment of outstanding debt in a number of different ways. Some judgments can even secure the repayment of debt during the bankruptcy process. Once entered, the judgment allows a debt collector to pursue civil complaints and other relief through the small claims court in Boston. Wage garnishment is one of the most effective forms of payment from unwilling debtors. This ensures that the creditor receives payment on a regular basis and often increases the total amount due to incorporate court costs and collection fees.
Massachusetts Debt Collection Attorney
When a debtor or group of debtors refuse to resolve an unpaid balance, the most obvious course of action is to hire a Massachusetts debt collection attorney. Choosing an expert to handle the debt collection process frees up employees to continue in their own area of expertise and keep the business running smoothly. Debt collection attorneys have access to a plethora of resources that most companies do not have available. When selecting a debt collection attorney, be sure to choose a company that only gets paid based on their successful collection of specific debts. This creates a win-win agreement and ensures that debt collection efforts are worth the cost.