Bill Collection Agency

A bill collection agency is a third-party entity hired by creditors to collect payment on delinquent accounts. However, the job of collecting past due monies involves dealing with consumers on a professional and emotional level which is regulated by state and federal laws. As economic woes increase in the United States and abroad, consumers of every socio-economic level are experiencing monetary problems such as foreclosures, business failures, and bankrutpcy. Added to this volatile mix is a sluggish housing market and high-interest lending. The result is a cash-strapped public with reduced spending power and an increasing amount of unpaid credit card debt. Debtors faced with a myriad of financial problems either don't have the cash to pay past due accounts, or lack the ability to make a sufficient income to manage household finances. However, in spite of a lagging economy, creditors deserve payment for goods and services rendered. The welfare of the U.S. economic system depends largely on the ability of corporations, manufacturers, retailers, and healthcare professionals to stay in business; and they can only remain viable if they get paid.

A bill collection agency works diligently on behalf of creditors to secure payment from delinquent debtors for a certain percentage of recovered funds. Percentages can range from as little as 15% to as much as 50%; and some charge a one-time administrative fee for each account. As a neutral party, the debt recovery firm can exert influence and apply a measure of pressure on delinquent debtors, which could place creditors in an unfavorable light. Physicians, business owners, and retailers who spend years building up a loyal customer base simply don't want to have to use tactics to collect monies owed to them which might be perceived by long standing customers as strong-arming. That's why physicians known for a cheerful bedside manner will seldom be found calling patients about past due bills. "A good name is rather to be chosen than great riches, and loving favour than silver and gold" (Proverbs 22:1). But when the physician's office administrator consistently issues gentle reminders and collection letters, with little response from delinquent payers, then it is time to call in the "big boys."

Calling in the "big boys" must still be done with decorum and within the limits of the Fair Debt Collection Practices Act (FDCPA), issued by the federal government in 1977. Most debtors are unaware that the FDCPA prohibits a bill collection agency from making threats of imprisonment or doing bodily harm for unpaid debts; calling before dawn or well after midnight; or making harassing phone calls to debtors on the job, especially after the debtor has given instructions not to be contacted at a place of employment. Other prohibited practices include contacting family members, coworkers, or employers and sharing confidential information, which places the debtor's job or reputation in jeopardy. A debt recovery firm may call debtors directly or solicit relatives, family members and employers for information, such as a new address or phone number after debtors relocate. However agencies are strictly prohibited from discussing the reason for the call or details about the debtor's account. A bill collection agency can send registered letters via the postal service which require a signature to acknowledge the debtor's receipt of a creditor's intent to prosecute or take action.

After efforts fail to elicit a favorable debtor response, a persistent bill collection agency can undertake more severe recovery efforts, such as wage garnishment, lawsuits, and judgments in states where they are allowed. By law, wage garnishments cannot exceed one-third of the employee's income; and workers making less than $20,000 are exempt. When third-party agencies have the court issue an order to garnishee the debtor's wages via mandatory payroll deductions, the court notifies the employer to initiate the process. Employers are responsible for deducting monies from each paycheck and forwarding funds to the court. The court then becomes an agent for the bill collection agency and forwards the debtor's funds to agency's attorney. Wage garnishments are a surefire way to settle with creditors, but the process can cause some debtors to lose out with employers. Companies realize that employees have personal problems, but the time and money expended by employers to manage employee garnishments may adversely affect a worker's chances for merit raises and promotions.

Debtors who have been contacted by a bill collection agency should deal with indebtedness head on. The problem won't go away on its own and the more debtors ignore phone calls and letters, the more late fees and administrative costs will add up. The moment harried debtors realize that they are unable to honor financial obligations, they should respond to debt recovery letters with a phone call or email. Most agencies will be happy to make payment arrangements to accommodate debtors who have lost employment or income due to chronic illness or layoffs. Although under financial distress, honesty is the best policy when dealing with recovery agents; and debtors should refrain from making promises that are impossible to keep. Each time debtors fail to honor payment arrangements, the bill collection agency will make a note of broken promises in customer records and add more late fees. It is better not to verbally commit to making a payment, unless debtors intend to fully comply with agreements previously reached with recovery agencies. But the best hedge against collection of delinquent accounts is to develop a practical budget and stop overspending. In a lagging economy, consumers will have to forego luxury items simply to afford high-priced gas and food. But, as debtors take a more responsible attitude towards consumer spending, the collection call will become a thing of the past.

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