Any
business or lending institution that extends credit to its customers or members
will inevitably be faced with bad debts.
To insure maximum collection results, creditors should establish credit
and collection policies before a problem occurs.
Before
you extend credit, there are several things that you can do to reduce your risk.
1. Obtain full names, addresses, telephone
numbers, places of work, social security numbers and dates of birth.
2. Obtain the name of the customer's bank,
branch, and account number.
3. Review a credit report.
4. Ensure that all credit terms are clear.
5. Have personal guarantees for small
businesses.
6. Perfect security interest in events of
large credit.
When
accepting personal checks, take the following precautions:
1. Insist on two pieces of identification,
at least one of which has the customer's photo.
A driver's license and a credit card are ideal.
2. Require checks to be made out in your
presence.
3. Compare the signature on the check with
that on the ID.
4. Limit checks to the exact amount of the
sale.
5. Accept only checks drawn on local
banks.
6. Verify the customer's address and phone
number on the check. Also note the
customer's social security number and/or driver's license number.
7. Be cautious when accepting checks with
low numbers (indicating that the account was recently opened).
8. Consider subscribing to a check
verifying service. For a modest fee,
such a service allows you to call a toll-free number and learn immediately if
you can safely accept the check. If a
check bounces after being verified using this procedure, the service will cover
your loss.
When
the debt is in default, act promptly!
The longer you wait, the harder collection will probably be. The firm of Lafayette, Ayers & Whitlock, PLC usually
recommends immediate telephone calls, followed by a series of two or three letters. In the final letter, give a definite and
short deadline with the promise of attorney action.
The
decision as to when a creditor should deliver its accounts to counsel for
collection is not always an easy one. Some creditors deliver collections accounts to
counsel after the initial demand has failed to produce results. Some creditors desire to have their
credit/collection manager take their judgment and attempt collection by payment
plan, garnishment, or even sometimes, sheriff's levy.
The
problem frequently encountered by creditors who pursue their own judgments,
however, is that in most cases the ability to collect without the assistance of
counsel ends prior to the receipt of payment in full. When this occurs, counsel must normally
assume collection activities after the trail is cold. Further, since the creditor was not
represented by counsel at the time of judgment, the judgment order does not
include attorney's fees; nevertheless, attorney fees will now be charged to the
creditor. In addition, if the creditor's
credit/collection manager failed to properly docket the judgment, collection could
be forever impaired.
The
firm recommends that creditors immediately deliver accounts to counsel upon the
failure of the demand for payment.
Creditors should ensure that provisions for attorney fees and interest
are included in all loan, contract and/or account documents so that counsel can
assess these costs upon delivery. The
firm further recommends that all accounts be delivered while the
"trail" is still warm--no more then sixty days from default.
The
firm has aggressive collection counsel and staff who represent numerous Credit
Unions, Homeowner Associations, property management companies, loan companies,
businesses, doctor's offices, and private citizens. The firm is willing to pursue accounts from
start to finish, or even finish accounts already in progress. Please call me at 545-6251 for more
information. Eddie.
No comments:
Post a Comment