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When Is it Time to Send a Debt to a Collections Agency?

Posted on in Debt Collection

Chicago creditor’s rights lawyer for using debt collection agenciesThe COVID-19 pandemic has affected the world in horrific ways. Many people are still experiencing financial difficulties because of the pandemic. Various types of businesses across the country were shut down for months at the height of the pandemic, leaving millions of people without a job and without income. Now, a year later, the economy is slowly starting to pick back up, but many people are still struggling financially and missing payments on debts they owe. As a lender, not receiving payments can also be financially burdensome, forcing you to take action. In many cases, a lender will send an individual’s debt to a collection agency. However, sending a debt to collections is a big decision to make that could greatly affect the borrower and have an impact on the amount you receive. How do you know if sending a debt to collections is the right call?

Reasons to Consider Debt Collection

Before you decide to send a debt to collections to attempt to receive the money you are owed, there are several things that you should consider. Here are a few factors that may indicate that it is time to use a collection agency:

  • It has been more than 90 days since your debtor’s payment was due. You cannot just immediately refer a borrower to a collection agency if their payment is late. Many people make late payments, but they do so consistently. However, when a payment is more than 90 days late, this should raise red flags, especially if the borrower typically pays on time.

  • You have tried other methods to collect the debt. Before you consider sending your borrower’s account to collections, you should attempt to gather the debt yourself. There are various ways you can do this -- phone calls, emails, letters sent to their home, invoices requesting payment, etc. These methods can be effective and are much cheaper than using a collection agency if they are successful. However, if you have already tried these things, and none of them have worked, a collection agency may be the answer.

  • Your borrower has been ignoring your communication attempts. Another thing that should trigger a red flag is a borrower who does not respond to communication efforts. Caller ID is nearly universal at this point, and it is often used to monitor (and ignore) calls from certain people. If your borrower hangs up when you call or will not respond to emails, you may need to enlist help from a collection agency.

Contact a Chicago Debt Collection Attorney Today

At Walinski & Associates, P.C., we understand that receiving the debt that is owed to you is your top priority. Our knowledgeable and effective team of Chicago, IL debt collection lawyers can help you understand your best options for obtaining the money that is rightfully yours. To speak with a professional, call our office today at 312-704-0771 to schedule a consultation.

Sources:

https://www.businessnewsdaily.com/16074-debt-collection-dos-and-donts.html

https://www.magnifymoney.com/blog/consumer-watchdog/debt-in-collections/

Illinois Creditors Bar Association Chicago Bar Association Illinois State Bar Association
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