Small Claims Court - Sure, some will pay when they get the summons but most won't. So off to court you go. You'll win. They probably won't show up and you won't get any money. You will get a default judgement; another piece of paper that says somebody owes you money. But, you already knew that before you spent $20 to $50 and an hour or two to file in Small Claims Court and then show up for court.
Choose A Local Collection Agency - According to the American Collector's Association 2008 Benchmark Survey, the average agency recovered less than 14% of the dollars assigned to them for collection. And then the typical agency keeps 35% - 50%. Doesn't leave you with much, does it? Be sure to ask for actual status reports from clients of theirs in your industry, detailing the results you should expect.
Hire An Attorney - Not a bad option for large balances.(over $1,000) They typically charge 33% of balances recovered. But, how much will they make on YOUR balances? How hard will they work to recover $100?
Seek Out A Fixed Fee Agency - Since doing nothing costs you 1/2% per day, why wait 6 months to turn a delinquent account over to an agency? 45% of your money will simply evaporate; become un-collectable by waiting. And let's face it: If you really analyze the success of your in-house efforts between 3 and 6 months, you'll admit that you are having little or no impact. But then, why pay a typical agency 30% to 50%. Since all collection agencies have the same tools available; mailing demands, making phone calls, and suing, why not find an agency that will recover your accounts for a flat fee of $10 to $12 per account?
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