Waiting to collect debt not only delays any potential payment, it also adds additional hurdles to your debt collection process.
As a business ages and grows, managing accounts receivables with detailed debt collection practices becomes essential to its success. Uncollected debt can pile up before you know it, putting a serious financial strain on your business’s ability to operate. Without effective debt collection practices or if you find yourself waiting to collect debt, you run the risk of putting your business in real jeopardy.
No Reason to Delay
Once you have tried for 90 days to collect on any outstanding debt, it is time to consider hiring a debt collection attorney. Be sure to document any emails, letters, and phone calls in relation to the debt. If those requests for payment go unanswered, or promises are made but not kept, it’s time to call an experienced attorney.
There’s a variety of reasons why waiting to collect debt further complicates the collection process:
- Out of Business: Failure to pay bills is sometimes an indicator that a company is having financial difficulties. If you wait too long to turn over a debt for collection, you risk the debtor going out of business, which can create further delays in the process.
- Moving Away: A business or individual may move out of state, making it more difficult to locate the debtor. Out-of-state collections are not impossible, but they require additional time and resources.
- Incur More Debt: There’s a very real risk that a business or person that fails to pay on a debt can be incurring even more debt and more unpaid bills. The worse a business’s financial situation becomes, the greater the risk that the debtor will file for bankruptcy protection.
- Loss of Assets: Businesses and individuals facing a dire financial situation are more likely to sell off assets. Losing these assets is a lost opportunity, as often creditors can attach liens on them, preventing them from being sold or directing the profits of any sales to the lien holder.
- Join the crowd: You may not be the only creditor waiting to collect debt from a particular business or individual. More proactive parties may take legal action first, which may allow them to claim any assets and place liens on property before you have the opportunity.
- Expenses Increase Over Time: If there is significant lag time in the debt collection process, it can be more costly in the long-run. There could be potentially higher contingency fees for collection, which means less of the collected debt will go back in your pocket.
- Time Drain: The reality is you have better uses for your time. Your primary business is not debt collection. You need a professional debt collection attorney when it comes time to get the money you are owed and you deserve.
If your business has been waiting to collect debt, contact McHughes Law Firm today at (877) 750-6173 to learn more about your debt collection options in Arkansas.