DEBT COLLECTION HINTS
Where to go from here? You have politely requested, threatened, begged and pleaded for repayment of monies rightfully due and owing to you, but nothing is working. I thought I would give you some tips on what to do when a client/individual refuses to pay as well as how to safeguard yourself to ensure success when collecting on a judgment if litigation is required.
When to send an account to collections
First of all, you know your client best. Trust your instinct – if you are getting an uneasy feeling that payment is not forthcoming, do not wait! Your instinct is always right! If you are still not sure, call us here at AzPerLegal and we can discuss options. Typically, when an account reaches 60 to 90 days, it is time to send an account to collections. The reason is the longer you wait, the harder it is to collect. There is truth to the saying “strike when the iron is hot”!
Ways to protect yourself to ensure success when collecting.
First and foremost, for any debt collection, get as much and as accurate contact details as you can. Make sure your invoice notes the name of the company/individual. Get a business card! A first name or last name is not enough to work with. Always get the full address of the individual or company, a phone number (cell and landline if possible) and obtain an email address – everyone has an email address nowadays. If they are reluctant to provide an email address, tell them you want to email them a copy of the invoice. The reason for obtaining complete contact information is that in the event we are forced to pursue the debtor through the legal process, we have the means with which to serve documents on them. If worse comes to worse, we are able to serve documents via email, although the process is a little more complex and hence, more expensive. The more information you obtain, the easier our job is and the less expensive it is for you trying to collect the debt.
If you are accepting a down payment, try to obtain that payment by way of cheque. Make sure to photocopy that cheque as it contains banking information that will be vital in the event litigation is required. If you are successful in obtaining a judgment (winning), one of the ways to collect on that judgment is to garnishee. If we have banking information (bank and branch), we can successfully garnishee the debtor’s bank account. A nice thing about garnisheeing is that for each garnishee you issue, you are able to add an extra $500 onto your judgment as costs! See Civil Enforcement Act and Civil Enforcement Regulations.
In the event of an individual, engage them in a conversation. Find out what they do for a living, who they work for. The goal is to find out the name of their employer. Employment information is invaluable when dealing with an individual because again, if litigation is required and we are successful in obtaining a judgment in your favour, we have an avenue to collect. We can garnishee the debtor’s wages! An employment garnishee remains in effect for two years and it is very unlikely that an individual will go so far as to quit their job (particularly in this current economy) to avoid paying. Again, we are able to add an extra $500.00 onto the amount of your judgment when garnisheeing.
Keep detailed accounts of your conversations with the debtor – email communications, telephone conversations, etc. If you have a telephone conversation, make sure to keep detailed notes of it. THIS IS YOUR EVIDENCE should you ever need to proceed legally.
Why AzPerLegal For Debt Collection?
Christine Herrington has extensive experience in collecting account for law firms in the City of Calgary. She has a proven track record.
AzPerLegal does not charge what other debt collection agencies charge. Other debt collection agencies typically charge between 30% to 50% of the debt collected. AzPerLegal does not. Please refer to the “Debt Collection” tab for pricing.
Finally, AzPerLegal sees itself as an extension of your business’ reputation. We do not bully nor threaten. We are fair, yet firm. Our purpose is to resolve the matter in a professional and nonconfrontational manner, however, should the debtor attempt to be evasive, we will come to the battle fully armed!
