Collections: Strategies for Recovering Outstanding Debt
Are you attempting to collect on an outstanding debt? A proactive approach is key. At the Law Offices of Andrew Ritholz, we have extensive experience helping our clients secure the greatest possible financial recovery. In this article, our California debt collection attorney highlights some of the most effective strategies for recovering outstanding debt.
Strategies for Recovering Outstanding Debt
1. Stay in Communication With the Debtor
Communication is one of the most underappreciated aspects of debt collection. It is a big mistake to fall out of regulator communication with a debtor—especially when there is an account that is delinquent. Maintaining regular communication with the debtor is crucial. Be sure to remind them of their debts in a professional, courteous, clear, and firm manner. Avoid harassment, but be willing to follow up with consistent communication emails, letters, or phone calls to provide a reminder that an amount is owed. There should be no confusion in the debtor’s mind regarding any key details, such as the amount due, payment deadlines, and options for resolving the matter.
2. Put a High Priority on Aging Accounts
Whether you are attempting to collect on a consumer debt or a commercial debt, time is of the essence. Here is one of the central rules of debt collection in California: Aging accounts—those being the debts that have been outstanding for a significant period—should be prioritized. The longer a debt remains unpaid, the harder it becomes to collect. Even if the statute of limitations is not an immediate concern, businesses should still be proactive. You should be prepared to develop and implement a systematic approach to track and manage aging accounts, thereby ensuring that they receive the proper attention and are given a higher level of priority.
3. Be Willing to Offer Flexible Payment Plans
Flexibility can be a key asset in debt recovery. If a debtor cannot pay the full amount owed at the current moment, it is generally not a very good strategy to present them with an all-or-nothing proposition. Instead, offering debtors who have delinquent accounts options for a flexible payment plan can make the repayment process far less daunting for them. Well-structured payment plan options help to get delinquent accounts back on the right path. You should always try to tailor the payment plans according to the debtor’s financial capacity. Payment plans help to increase the chances that you will recover the absolute maximum amount, which is ideally the full amount owed. Of course, in some cases, a settlement may be the right strategy.
4. Send a Demand Letter to the Debtor
A well-drafted demand letter can be an effective debt collection tool. The Legal Information Institute explains that a demand letter is a type of legal notice. The letter should be firm, clear, and written by an experienced attorney. Among other things, a debt collection demand letter in California should typically state the amount owed, the due date, and the consequences of non-payment. Sending a demand letter emphasizes the seriousness of the matter. Most often, it will state an intent to file a lawsuit if the matter is not resolved. It may also include options for a payment plan.
5. File a Lawsuit and Obtain a Judgment
You have the right to file a lawsuit to collect on an outstanding debt. Of course, a lawsuit should not be your first strategy. It is always best to seek voluntary compliance before taking a case to court. That being said, if all previous strategies have been unsuccessful, a business should absolutely consider filing a lawsuit as a last resort. When doing so, you should be represented by a California debt collection attorney. Your lawyer will ensure that all proper procedures are filed so that you can obtain a judgment. A court judgment can pave the way for various recovery options like wage garnishment or property liens. These are powerful collection remedies that may be used once a court judgment is in place.
Get Help From a Southern California Debt Collection Lawyer Today
At the Law Offices of Andrew Ritholz, our California debt collection attorneys go above and beyond to provide solutions-driven guidance to clients. We are ready to help you find the best strategy to collect outstanding debts. Reach out to us by phone or connect with us online to set up your free, no-obligation initial appointment. With law offices in Pasadena and Monrovia, we provide debt collection representation throughout all of Southern California.
