When someone owes your company money, you may have to make concerted efforts to compel them to repay you. While most people will make timely payments, not everyone takes on a debt with the intention to repay it in full.
Unfortunately, it is common for individuals with the resources to meet their financial obligations to intentionally avoid repaying certain debts. When someone has fallen behind on their account, you may need to initiate collection activities.
What limitations are there regarding your attempts to collect money owed to you?
There are rules that limit your communication attempts
Frequently contacting someone to push them to make payment arrangements can quickly cross the line between persistence and abuse. The nature of your company’s relationship with the individual involved will determine what restrictions apply to your debt collection communications with them.
When you are the business that provided the goods or services to them, your direct business relationship may make it appropriate for you to contact them daily or several times a week. If you are a company hired by the original creditor, then daily calls might cross the line into harassment.
It’s also important to understand that if a debtor sends a certified letter asking you to stop contacting them or if they advise you that they cannot receive personal calls at work that you abide by those requests.
There are rules about how you talk to the person who owes you money
You cannot become abusive or threatening towards someone just because they owe your company money. You can tell them that legal action may result from continued non-payment, but you can’t threaten to have them arrested for non-payment.
Even court-ordered collections have restrictions
There are limits on court enforcement actions as well. If someone truly refuses to pay, you may try to take them to court, or maybe you want to garnish their wages. Even then, you may be subject to specific limitations, such as rules that prevent you from garnishing the wages of someone who already doesn’t earn enough to support themselves or limiting how much you can collect.
Learning more about your rights as a creditor and the rules that apply to business collection activity can help you get the money someone owes you without taking legal or financial risks.