In the first article of this series I wrote about what a collections account was. It is an unpaid account that usually runs 90 to 120 days late. Delinquent accounts will either be collected by the original creditor itself, or sent out to collection agencies. Sending an account out to a collection agency benefits the creditor because they can both write the debt off on their taxes and collect profit on the money owed.
Does your small business have rising unpaid invoices? Is your staff too occupied to call debtors? It may make sense to hire a debt collection agency. For a very affordable fee, they can collect your bad debts and shore up your finances.
Your credit score, and your criminal record. Both are based on on your past actions, both can make you or break you, and both follow you around for a very long time. But, only you, and perhaps your lawyer, are aware of your criminal record. Your credit score is a whole other story. It can be pulled when you apply for a new credit card, go for that new job, try to get a new car, or even try to move in to a new place.
As we all know, we are in a recession that has left millions of people without employment, and millions more searching for ways to save money and cut down on costs. As more people lose their jobs, those with less experience will find the most difficulty, leaving younger workers and recent college graduates being hit especially hard.
From 1999 to 2009, premium costs for family insurance have grown by one hundred and thirty one percent. Easily, that’s over three times the rate at which working wages rose during this period. In this time of economic uncertainty, millions of jobs have been lost, placing workers who just lost their jobs at risk of also living without health insurance. For those who are still employed, employers are pushing more of the costs of health insurance onto their workers as they struggle with economic uncertainty. Then there are blue collar and retail workers, waitresses and the like who are paid less, work harder and are not offered health insurance plans at their jobs. No wonder that Americans are struggling to pay their medical bills.
Older people are suffering from the stress of the recession just as much as younger people. A number of them are not able to work because of physical and mental fragility, but still live in homes with mortgages. Some may have maxed out credit cards, but with no employment and minimal help from Medicare, social security checks, and retirement funds there seems to be little recourse.
Much like every other profession, the collections business has become even more trying as the economy takes a fall, while the rate of unemployment rises. With the advent of more and more unpaid bills, the collections industry may very well be booming. However logic dictates that with unemployment, and an awful economy more and more people in debt will be unable to pay. These days, if a collector is able to recoup anything, they will usually have to accept longer periods of time and smaller payments.
U.S. Bankruptcy Code imposes something called an automatic stay the moment that a petition for bankruptcy is filed. The automatic stay will typically prevent the enforcement, commencement, or appeal of actions and judgments against a debtor from the creditors they owe money to who are trying to collect these debts incurred prior to the bankruptcy petition. The automatic stay also protects property of the bankruptcy estate itself from collection actions and proceedings.
Would you be mortified if a man in a tuxedo and a top hat followed you into a restaurant and silently joined your lunch date? How about a trio of men with more to love dressed like superheroes asking your neighbors for donations to assist you in your financial situation?
The most current study of the American economy attests that incomes are decreasing for those just starting out. The Collections Industry has reason to believe that this paradigm shift will be permanent.