S. , Debt Recovery Is Done In A More Humane Manner

Category: Finance, Credit.

When all in house efforts fail to recover a debt, they are handed over to a debt recovery agent or collection agent. Debt recovery agents usually contact the defaulting individual or company through letters initially followed by phone calls.

This article discusses how the latter functions and recovers bad debts. They may use automated telephone systems that keep track of the calls or computers with software that periodically dispatches reminders to the debtor. If all the normal mode of debt collection fails to yield any result, the collection agency may resort to legal recourse and approach a court to settle the dispute. If the debt is small, phone calls may be too expensive and only letters may be sent. Debt recovery agents have reputation of using intimidation and harassment to recover bad debts in the past. S. , debt recovery is done in a more humane manner.

But with the passing of Fair Debt Collection Practices Act in the U. This act prescribes that the debtors must be treated in a fair way and that they should not be threatened or bullied. When all means of persuasion have failed, debt recovery agents can be approached for debts that are overdue by at least a month. Also debt recovery agents have realized that it is better to work with the debtors and discuss means of repaying the loan with payment plans and other options which has greater chances of success than coercion. The pros and cons of handing over the case have to be thoroughly analyzed depending on each individual case. Once handed over, the debt recovery agent handles all the correspondence and details of settlement of the account. But once it has been determined that there is no way out, the bad account should be handed over to debt recovery agent at the earliest as the chances of recovery is more when the overdue period is less.

Some pointers to a debt going bad and when it is time to hand it over to a debt recovery agent are listed below: - The payment terms are not adhered to by the customer like frequent postponement or delayed payment on frivolous grounds. - The customer fails to answer reminders through phone calls and/ or in writing or secretly changes the contact telephone no and/ or address. - The customer denies owing any money in spite of written records. - Baseless complaints are made by the customer repeatedly regarding the quality of product or service whenever asked for payment

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