How to Successfully Collect a Debt

Employers both big and large have a huge issue when it comes to debt collection. If you have ever loaned anyone money of any amount, you know it is not an easy thing to get it back in a timely manner. However, if you follow a few steps, you will greatly increase your chances of recovering any past due funds.

Instructions

1

Contact your local small claims court. Contact the court in your area and request the paperwork you would need to begin a claims action. Make sure that the person or business who owes you money understands that they are being served, and then go to the court on the date of your hearing. Keep in mind that you can represent yourself without the assistance of a lawyer. However, make sure you know the specific laws of your state in this area by contacting a qualified lawyer. Fees in each state will vary, so be prepared to pay some type of fee during the process.

2

Hire a collection agency. If you are having trouble collecting on your debts, these agencies can assist you in the process for a fee. The fee that these groups charge can be quite sizable, and can be as high as 50 percent of the debt that is collected. The negative side of working with collection agencies is that many of them will only work with the cases they feel they can win. Interview several agencies and find out if they have a strong track record of collecting on any past due debt. Require them to provide you with references of previous clients so that you can see what kinds of results they normally get for their clients.

3

Consider contacting the credit bureau of your state. If the methods listed above do not enable you to collect on the debt that is owed to you, you should call the credit bureau of your state. Reaching them will give you the opportunity to have the bad debt of the person reflected on their actual credit report. Once the person finds out why they were denied credit in the future, they may contact you to pay their debt in full. After you contact the credit bureau, they will guide you through the entire process of placing the bad debt on the credit report of the individual.