The Ultimate Guide to What Information is Needed to Send Someone to Collections
Every business nowadays, be it large or small, has to deal with customers defaulting on their payments. This is where a collections agency comes in. By partnering with a collections agency, businesses can ensure that they receive payments from delinquent customers without damaging their relationship with them.
However, before a collections agency can be engaged, particular information must be collected and provided to them. In this article, we have created an ultimate guide to what information is needed to send someone to collections.
Overview
Before we dive into the specifics of what information is needed for collections, let’s look at what collections are and how a collections agency operates. Essentially, collections are a process by which the money owed by a delinquent customer is recovered through the services of a collections agency.
Once a business has exhausted all internal resources to collect the debt, they may opt to engage a third-party collections agency to recover the sums owed. When a business engages a collections agency, the agency steps into the shoes of the business to collect the debt.
Information Required for Collections
To ensure a collections agency can achieve the best results with regards to debt recovery, they need certain information from the business that is owed the money, including:
Debtor Details
The most crucial information required by the collections agency is the debtor’s details. These ‘mandatory’ details include the debtor’s full name, current address, phone number, and any alternative contact information if available.
Details of the Outstanding Debt
When submitting debt to a collections agency, the business should provide any documentation related to the debt and any agreements made between the parties. Any supporting information that aids the collections process should also be shared with the agency.
Collection History
A business must also share the history of their collection efforts with the agency. Such records include copies of any bills sent before selling the account to the agency, accounts receivables reports, and any internal communication between the business and the debtor related to the debt.
Additional Information
A collections agency may require additional information depending on the type of debt and the state law that governs bankruptcy and collections. Other information the agency might request includes:
Demographic Information
Additional demographic information such as age, gender, and employment status can aid collections agencies in their efforts to locate and contact debtors.
Previous Addresses
Previous addresses of the debtor help the agency track their whereabouts.
Legal Documentation
Finally, the collections agency may require specific legal documentation depending on the state of residence of the debtor, the sum of the debt, and other factors.
Conclusion
In conclusion, a lot of critical information is required to ensure that a collections agency can recover the debt owed by a delinquent customer successfully. By presenting complete and accurate information to the collections agency, businesses can ensure that their partnership with the agency nets the desired results within the shortest time possible.
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