Debtors will often pay a collection agency even though they never cooperated with the original creditor, mainly because collection agencies typically increase the psychological anxiety associated with a debt. Second, the debtor will understand that the creditor is serious about collecting their money. Also, many debtors are wary of the impact that a collection account can have on their credit score.
There are several variables that will influence recovery rates: the age of the debt is arguably the most important factor. The older the debt is, the lower the chance of recovery. Other important variables include: industry, balance, documentation and demographics.
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Claims are entered within the first 24 hours and the first collection notice is mailed immediately thereafter. This notice is followed up with phone calls and additional letters. Some debts are collected in the first 2-3 days while others may take up to 2 or 3 years!, debtors who dispute the debt and debtors who are simply uncooperative. On average, though, we collect most of our client payments within the first 30 days.
If the debtor disputes the debt, R&D RECOVERY will provide them with verification, which typically consists of the documentation initially provided by the client. On occasion and depending on the dispute, R&D RECOVERY may have to request additional documentation from you, the client, in order to properly verify the debt. If the debtor simply refuses to pay, we will review the file to determine if litigation is advisable and upon client approval, will file suit or if out of state hire collection counsel. Relevant factors to consider prior to commencing litigation include: good documentation, balance, cost of litigation and a good address to serve the debtor with the lawsuit.
Yes. R&D RECOVERY will attempt to recover your debt in-house. In the event litigation becomes necessary, R&D RECOVERY will request your authorization to file suit in Magistrate Court. We also keep you updated as to the progress made by our collection staff working on your behalf. Our clients appreciate the fact that we take care of everything throughout the collection process, especially the legal process since many people are not familiar with the complexities involved in a lawsuit.
The age of a delinquent account is one of the biggest factors in determining whether or not a debt gets paid. The older the debt, the harder it is to collect. Research on the collectability of delinquent accounts clearly shows that the most advantageous time to enlist the services of a collection agency is within 60-90 days of the invoice due date. Incorporating this strategy will help ensure maximum recoveries with the least cost to your company.
