What are Commercial Collections?

What are Commercial Collections?

Jan 17, 2023

Whenever you have debt that you need to obtain, the process of acquiring your funds can be vigorous and you may need legal assistance. If you are a business owner and your clients are not paying their fees on time or at all, you may find yourself in a postponement of resources to adequately manage your company. In this article we will discuss commercial debt collection and how it works, an attorney’s role in the collection process, and your options as a business owner acquiring debt owed to you.

How Commercial Debt Collection Works

As proprietor of your business, the importance of an increasing revenue flow is vital to the success of your business. Negative financial obligations such as debt, can certainly affect your revenue flow and delay the overall profits of your company. To better understand the process of debt collection, it is just to acknowledge the legal right that creditors have to the money owed to them and the legal process that allows this right, but also protects both the creditor and debtor.

In the debt collection process, there are (3) key aspects:

  1. In the first (6) months, the debtor will be in acquaintance with the creditor’s internal collector. This portion of time is beneficial for the debtor in trying to make amends with the creditor and resolve the debt themselves.

  2. If the creditor continues to struggle with collecting their debt, they will hire a 3rd party agency to handle this debt for them. If the debt is still owed to the original creditor and if the 3rd party effectively retrieves the debt, they will earn a commission or fee from the debt, which is decided by the creditor.

  3. The final aspect of debt collection is when the original creditor hands over their debt to a collection agency. Once this happens, the original creditor is no longer participating, and the collection agency will pursue as much of the debt as possible to make a profit.

Commonly, creditors will inquire with debt-collection law firms rather than collection agencies, because of the influence an attorney presence can have on the likelihood that the debtor will pay out.

A Business Attorney’s Role in Debt Collection

Hiring a lawyer to help with your debt can have tremendous bonuses. Adhering to the power of litigation to permit an attorney to transform non-performing debt into positive revenue streams is the ultimate outcome. Lawyers can help enforce fair debt collection and bring action against an offender if a law is violated. Complete communication is given to the attorney, relieving the client of possible stress that the collection process can entail. A key factor in hiring an attorney is allowing them to negotiate on your behalf. They will have more understanding of gaining debt balances to a reasonable amount for lower payoff. In the circumstance of a payment plan, the attorney can communicate all boundaries with the creditor to ensure the debt is going to be paid in a manner that fits the client.

Your Options

Paying off a debt or collecting on one owed to you can be a tedious process. The steps to debt payment include:

  • Verifying you owe the amount indicated
  • Examining your state’s statute of limitation
  • Understanding your debt collection rights
  • Figuring out how much you can pay
  • Requesting to have your account terminated if you have paid a large sum
  • Setting up a payment plan
  • Fulfilling your payment
  • Documenting everything

In these instances, Aaron Bruner Law is extensively equipped in debt collection and can help you through each step and circumstance through the debt collection process. Contact us today to evaluate your situation and find the best fit solution for you.

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