Posted on: 9 July 2015
When one of your customers or clients fails to pay you on time, it can lead to major disruptions for your enterprise. While there are collection services that can help you to collect the money owed to your enterprise, there are many managers and business owners that lack experience or knowledge about working with these services. If you are one of these people, you will likely benefit from having the following couple of questions regarding collection services addressed.
How Much Does It Cost To Use Debt Collection Services?
Some people may assume that collection services are extremely expensive to use, and as a result, they may not think this is a viable option for small amounts of money. However, this is not always the case, and many of these services offer their clients a range of options for paying.
One of the most common is a simple percentage fee that is based on the total amount to collected. Under this arrangement, you will only receive your portion of the money collected if they are successful in getting payment. Another option is to actually sell the bad account to these providers. They will pay you based on the total value of the bill to be collected, and they will retain all of the money collected.
Will Bankruptcy Impact Your Ability To Collect?
There will be times when your debtor customers will be forced to file for bankruptcy protection before they are able to pay you back. When this happens, it can be disastrous for your attempts to collect the money because much of the debt will be erased by the courts at the conclusion of the bankruptcy process.
Luckily, there are steps you can take to help ensure that you will recover at least a portion of the money owed to you. By filing a petition with the court to be listed as a creditor, you will be included in any negotiations regarding the bankruptcy, and this will allow you to argue for your share of the money owed. Unfortunately, these situations can be highly complex, and you will likely need your attorney to handle this process for you.
When one of your customers fails to pay, you may wonder what options you have for collecting this money. By understanding the way that collection services charge and how bankruptcy will impact your filing, you will be in a better position to ensure that your company gets as much of the money owed to it as possible.Share