As long as there has been a system of monetary exchange people have been getting into debt. A person can promise to pay the money back that they have borrowed in a specific period. If that does not happen a debt collector will come looking for their money. There are now laws regarding debt and practices for commercial debt collection. These laws for debt collection will vary based on whether the debt is commercial or consumer debt.
Consumer Debt
When dealing with consumer debt this debt is between a business and a consumer. The consumer purchased something and now owes the business money. Some examples of this debt are money that is owed on a personal credit card or another type of loan.
Some laws control debt collection when it comes to dealing with consumers. The debt collector needs to be licensed in the state they work in. The privacy of the consumer also needs to be protected. The Fair Debt Collection Practices Act has certain regulations that must be followed for consumer debt and they cannot use abusive practices to collect this money. Consumers may also dispute this debt and may ask for proof that the debt is valid.
The debt collection service is allowed to send collection notices in the mail. If they do make phone contact with the consumer they must be informed that the call if for debt collection purposes and all information can be used to help them collect on that debt.
Commercial Debt
Commercial debt involves a business that owes another business money. Debt is the payment that is owed between businesses. There is less control and fewer regulations when it comes to collecting this debt. The law states that a business should be disciplined enough to know their operating rights and they do be able to pay back their financial obligations. The FDCPA does not have rules and regulations when it comes to collecting commercial debt. The agencies allow the business and their debt collectors to use their approach to collecting this debt.
When it comes to successful debt in the commercial field the skill of the debt collector is very important. There are different ways that they can go about collection thing debt. This is a specialized field and a business can enjoy success if they can collect money for their clients. The debt collector needs to be able to recover the money that is owed to their client while still keeping positive business relations.
When it comes to commercial collecting unethical practices are still not allowed but there is more flexibility for repayment. Each business can have its representative speak and work out a solution that is fair to both parties. They may call each other often to talk about regular repayment options.
Some collection agencies can work with commercial and consumer debt collection. To get the best service and best chance of betting repaid it is better for work with an agency that works on collecting one specific type of debt. Since there are different regulations needed for each type of debt it is best to work with an agency that is specialized in collections with a specific effort.
If a business is owned money they need to understand their options for collecting this debt and how they should proceed with the collection process. This will give them the best chance of getting some of this debt repaid and they will be able to continue with their business operations.
