What Steps Should You Take Before You Call in a Debt Collection Agency?

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After I had an accident and had to spend some time in the hospital, I decided that it was time to make a will and do some estate planning. After all, you never know what is around the corner, and I would hate for a family member to miss out on inheriting from me if I were to suddenly pass away. I worked with a lawyer to draft a will. We then discussed the various ways I could arrange my estate. I had been worried that I wouldn’t understand the different legal terms, but my lawyer took the time to carefully explain them. I am now much happier knowing that everything is in place. I decided to set up this blog to offer tips to other people who are in the process of planning their estate.


What Steps Should You Take Before You Call in a Debt Collection Agency?

10 July 2023
 Categories: Law, Blog

Debt collection agencies can be an effective way to recover unpaid debts, but before you call them in, there are a few steps you should take.

Send a Written Demand Letter

Before you call a debt collection agency, you should send a written demand letter to the debtor. In the letter, specify the amount the debtor owes and request immediate payment. The letter may also include a deadline for the payment. This is important as it serves as proof that you've taken reasonable steps to recover the debt in case the case goes to court. If the debtor fails to pay within the specified deadline, then you can proceed to the next step.

Consider Using a Mediator

If you've tried contacting the debtor and sending a demand letter, the next step is to consider using a mediator. A mediator can act as an impartial third party in resolving disputes and creating an agreement between you and the debtor. This can help avoid the need for a collection agency and possible legal action. Mediation is also a cheaper alternative to court.

Choose a Reputable Collection Agency

If all else fails, and you've decided to use a collection agency, then select the best agency you can find. Research the agency carefully and ask for references. It's important to choose an agency that will act professionally and abide by the law. Also, make sure to read and thoroughly understand the service contract and fee structure.

Document Everything

Throughout the debt collection process, it's essential to document everything. Keep all communication and documentation of every step taken, including communications with the debtor and collection agencies. This evidence can be crucial in the event of a legal dispute.

The Bottom Line

In summary, there are several steps you should take before calling in a debt collection agency. First, send a written demand letter informing the debtor of their outstanding debt. Second, seek legal counsel to understand your legal rights and any legal risks involved in the collection process. Then, consider using a mediator before resorting to a collection agency. Finally, keep meticulous documentation of your communication and documentation throughout the entire process. By following these steps, you can ensure a smooth debt collection process that abides by the law and avoids any complications.

If you do decide to use an agency, then choose a reputable one and understand the fee structure before signing any contracts. And don't hesitate to ask them any questions, as they help you to recover that outstanding debt. Reach out to a debt collection agency near you to learn more.