Published Friday, February 10, 2023 by Alan Holdren

How does/should a Collection Agency go about collection on bad debt for one of its clients? There are three basic steps that our agency uses:

1) A letter/validation notice goes out telling the debtor, the amount, the name of the creditor, a 30 day dispute notification provision, validation of debt by agency statement and verbiage that the agency will provide the name and address of the original creditor if different that on the notice they received.

2) Phone calls trying to obtain payment in full or some type of arrangement for increment payments on the debt.

3) Legal Proceedings if the first two steps are unsuccessful in starting a payment situation with the debtor. These could roll onto garnishments of the debtor’s wages and or bank accounts. In certain cases a “body attachment” can be asked for and a person could actually be arrested and put in jail until arrangements are reached or t he judge releases the debtor for other reasons.

These basic steps are how the majority of agencies work in general. As there are many types of collection areas, there are also many settle differences and considerations to be made when attempting to collect in a specialty area.