Debt collection is one of the toughest aspects of any business dealing. Although the majority of customers pay on time and without any cause for worry, there is a rather large number of clients whom businesses must chase in order to get their payment. When a business is unable to handle debt recovery on their own, they often turn to a collection agency to help them out. What usually happens when a collection agency gets involved is that they pay the company what is owed to them minus a small percentage and then they take it upon themselves to extract the payment from the defaulting customer.

Debt collection can be one of the most harrowing experiences for anyone to undergo first hand. However, exactly because some debt collection agencies have used harassment and intimidation in order to extract money from defaulting clients, there are strict debt collection laws that must be adhered too by every collection agency in business. In fact, if a collection agency steps out of line, there are avenues of recourse that a business or individual can access for help or protection.

If you own a business, then turning to a debt collection agency should always be your very last resort. There are ways to mitigate the chances of a client defaulting on their payments. Teaching your staff to be flexible and creative when handling debt collection issues can yield far greater results than the hard-nosed tactics most often employed in debt recovery. Before calling in the big guns, there are certain steps you can take to try and collect on a defaulting client. Noticing if a payment is falling behind is one of the keys to catching delinquent customers quickly. Sometimes a client has simply forgotten to pay a bill by the deadline. Sending a friendly reminder should generally be enough to jog their memory. However, if the reminder does not work, then a good idea would be having one of your staff call the customer to find out what is holding up payment. During the conversation, your employee can find out whether there are any mitigating factors in the non-payment and whether they can arrange for a partial payment or instalment payments in order to help the customer meet their debt obligations. Most customers will be glad to pay back what they owe in instalments.

However, if you try all of the above suggestions and you still do not get payment from your customer, then there is little choice but to turn the debt over to a collection agency. Debt recovery is a tough job – especially with so many individuals and businesses currently facing foreclosures and bankruptcies. If you must turn your debt over to a collection agency, then choose a reputable debt collection firm with which to do business. There are some highly unscrupulous debt collection companies that will harass and intimidate your customers and ultimate blacken your company’s name. Therefore, it is worth hiring a reputable and reliable debt collection firm for your debt recovery needs.