Time to call Mr. Wolf?
My title is for you Pulp Fiction fans and another attempt at humor on my part. Where do you draw the line with your in-house collections and hand over the burden to a collections attorney? That’s not an easy question to answer, but there are a few markers that may help.
- The account is 90 days overdue - if you’ve not heard from the debtor in three months, especially RE payments, the time has come to look at alternative methods of collecting.
- You cannot reach the debtor by phone, mail, email, or any other method - yup, he/she/it is hiding from you. However, hiding does as well when you have the power of the judicial system behind you (although using lawsuits may not always be the best option)
- All of a sudden, the debtor alleges some dispute over the debt, yet refuses to divulge the relevant details (date, nature of disputed charge, etc) of the dispute to you, or anyone for that matter.
- The debtor breaks promise after promise after promise to pay - you want to believe the debtor will pay, but this tactic just buys time for the debtor.
- You learn that other creditors are facing the same behavior by debtor as you are - i.e. not getting paid.
As always, this list is by no means exhaustive - there are a whole array of other signals indicating that you should consider outside collections help. Essentially, it is your company’s call whether to send debts out to an independent collector - consider how your internal collection team’s time is better spent working with willing or forgetful customers, versus investing resources chasing people who will not work with you until pressure is applied.
Chris Moander is an Attorney handling business law matters, business litigation, and collections matters throughout Wisconsin.
