Due to the state of the economy, there is a larger amount of delinquent debt and a rising number of debtors refusing payment, leading more businesses to trust pursuit of debt to commercial collection agencies. It relieves the burden of the business to find the resources to handle the collection procedures in-house while still recovering necessary funds.
Why are these agencies so much more successful in the pursuit of delinquent debt than individual businesses? Why is more money recovered by this process of outsourcing than by keeping the efforts in-house?
As previously mentioned, the number one reason commercial collection agencies achieve greater success at recovering delinquent debt is availability of resources. Aside from sheer manpower and industry expertise, these agencies have a number of tools at their disposals which aid in the debt collection process.
Asset Investigation - In the business of debt collection, it is essential to know what a debtor has available, in terms of liquid assets, cash flow, and expenditures, as well as hard assets which can be seized as collateral or sold to pay delinquent debt. Through asset investigation, these agencies can better determine a debtor's ability to pay and use that knowledge to aid in negotiations.
In addition, many businesses trying to collect default payments will call or send letters for collections purposes. In most cases, these impersonal contact methods are ignored by the debtor. However, agencies can take the pursuit a step further, arranging face-to-face meetings with the debtor, even at their place of business, which helps make the debtor more susceptible to the reality of being in debt.
Many agencies also have private investigators on retainer. In some cases, a debtor simply 'disappears', changing phone numbers, addresses, places of business, and essentially reinventing themselves in order to 'get lost' in the system. While each individual in a collection agency may not be able to discover the whereabouts of a particular debtor, a private investigator has the time and the tools to do so.
In fact, once the debtor is found, the private investigator often finds information regarding assets, debts, and ability to pay back what is owed, all information that can be turned over to commercial collection agencies in order to further their efforts in debt collection.
Because these agencies possess the resources and the knowledge to more doggedly pursue delinquent debt, commercial collection agencies enjoy greater success rates than in-house debt collection for the majority of businesses. In order to get finances back in order, businesses experiencing difficulties recovering delinquent debt may wish to consider this alternative.
Why are these agencies so much more successful in the pursuit of delinquent debt than individual businesses? Why is more money recovered by this process of outsourcing than by keeping the efforts in-house?
As previously mentioned, the number one reason commercial collection agencies achieve greater success at recovering delinquent debt is availability of resources. Aside from sheer manpower and industry expertise, these agencies have a number of tools at their disposals which aid in the debt collection process.
Asset Investigation - In the business of debt collection, it is essential to know what a debtor has available, in terms of liquid assets, cash flow, and expenditures, as well as hard assets which can be seized as collateral or sold to pay delinquent debt. Through asset investigation, these agencies can better determine a debtor's ability to pay and use that knowledge to aid in negotiations.
In addition, many businesses trying to collect default payments will call or send letters for collections purposes. In most cases, these impersonal contact methods are ignored by the debtor. However, agencies can take the pursuit a step further, arranging face-to-face meetings with the debtor, even at their place of business, which helps make the debtor more susceptible to the reality of being in debt.
Many agencies also have private investigators on retainer. In some cases, a debtor simply 'disappears', changing phone numbers, addresses, places of business, and essentially reinventing themselves in order to 'get lost' in the system. While each individual in a collection agency may not be able to discover the whereabouts of a particular debtor, a private investigator has the time and the tools to do so.
In fact, once the debtor is found, the private investigator often finds information regarding assets, debts, and ability to pay back what is owed, all information that can be turned over to commercial collection agencies in order to further their efforts in debt collection.
Because these agencies possess the resources and the knowledge to more doggedly pursue delinquent debt, commercial collection agencies enjoy greater success rates than in-house debt collection for the majority of businesses. In order to get finances back in order, businesses experiencing difficulties recovering delinquent debt may wish to consider this alternative.
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