As your small business grows, it becomes more important than ever to manage accounts receivables with detailed debt collection practices. Debts that you don’t collect can pile up before you know it, putting a serious financial strain on the ability of your business to operate. You need to have effective debt practices, so you can collect debt on time instead of waiting to do it.
When to Hire a Debt Collection Attorney
After you have tried 90 days to collect an outstanding debt, you must consider hiring
New York collection lawyers. Make sure to document any letters, emails, and phone calls in relation to the debt. If your requests for payment go unanswered, it’s time to contact an attorney.
Reasons You Should Not Wait to Collect Debt
Waiting to collect a debt can lead to further complications for your business. Here’s why:
The debtor may be out of business. Sometimes, if the debtor fails to pay their debts, this could mean they have financial challenges. When you wait too long to turn over a debt for collection, the debtor may go out of business, creating further delays in the process.
The debtor moves to another place. When your debtor moves out of state, it can be more difficult to locate them. It is possible to collect debts out of state; however, it requires more time and resources.
The debtor may incur more debts. A business or person who fails to pay on debt may incur even more debt and more unpaid bills. This increases the risk of them filing for bankruptcy protection. When this happens, you won’t be able to force them to pay. When the debtor incurs more debt, you will be joining other parties that also want to collect their debts. And these parties may take legal action first to claim any assets and place liens on property before you can.
The debtor may dispose of assets. A person or business that’s in a dire situation may sell off assets. Often, you can attack lines on these assets, so they can’t be sold or direct the profits of any sales to you, as the lien holder.
If you are trying to collect from late-paying customers, it can seriously affect your ability to do business while eating up valuable resources and time. Ensure you do it efficiently ad in compliance with the law by speaking with a skilled debt collection attorney.