With the state of our current economy many individuals have found themselves in debt and have acquired debtors. This creates a different scenario in life that many people past to the past year or two have not had experience with. The Journal of Collection Psychology would like to do our part in informing consumers of the debt collection timeline.
The debt collection timeline begins with a creditor. This creditor may be a business with an unpaid invoice for a particular good or service. consequently begins the creditor/debtor relationship. Some businesses try there own attempts at collecting monies for the unpaid obligation, however, some do not and those companies that do are often unsuccessful.
Many businesses then send out their invoices to a collection agencies. Within the next week or two the collection agency should be sending out debt collection letters. Letters that are sent to verify debt and often have a settlement offer. Also at the same time these letters are sent out, most collection agencies begin phone calls to these debtors to try to retrieve the original creditor’s monies. While most collection agencies job is not to mediate, collectors often gather information regarding their debt.
If efforts to reach debtors are unsuccessful or not enough information was given to the collection agency skip-tracing must be used. Some collection agencies charge additional for these sets; however, top tier collection agencies such as the ones I named earlier and various others do not charge additional for skip-tracing efforts.
Now some debtors just ignore the phone calls and ignore the letters. So this course of action of sending letters and trying to contact by phone can take multiple months. Many collection agencies will continue to collect on your behalf for as long as it takes; however, sometimes standard collection methods will not suffice. Typically the average time frame at this point is approximately two to three months.
If standard collection efforts cease to prove results using more aggressive methods may be necessary. Typically collection agencies at this point will send debtors to litigation. Most companies do not want their own lawyers in sending debtors to civil claims court because this can be a long, drawn out course of action that can be extremely costly. Typically litigation begins with the filing of paper work. Filing the paper work is not a quick or cheap thing, usually there are court fees and costs. The court may take 30 days, 60 days, possibly already longer to course of action these papers. The debtor must be served with a court notice, which often times is not an easy task to serve debtors. Then the court proceedings happen, if it is a quick case it can be done in a day. However, most debtors will get their lawyer or company lawyer involved, then court dates are often pushed back and the actual trials can take multiple months.
Many people believe that collecting a debt is as simple as picking up a phone and receiving money; however, as the Journal of Collection Psychology has proven debt collection in any given or particular case can take a year or more to collect on the debt.