In order for businesses and companies in New York to stay afloat, they must continually recover profits. Revenue comes from being paid for their services or products. However, if a customer fails to make a payment this can make it difficult to remain in good standing. Therefore, businesses often want to take legal steps to protect their company and collect these debts.
Whenever a business extends credit to customers or business partners, they must also be prepared to collect on these debts if they are not timely paid. The art of debt collection means complying with certain rules and regulations concerning debt collection. Additionally, a business will want to ensure that any debt collection actions will not destroy a business relationship they seek to maintain.
If you have determined that it is worth your time and efforts to collect a debt, it is important to become familiar with the routine steps in these matters. This is especially true if you are collecting from a party that is bankrupt. In these cases, the collection process must stop while they are in the bankruptcy process. However, once completed, it is possible to collect on these debts depending on the type of bankruptcy they filed for and what debts were erased.
The Fair Debt Collection Practices Act protects debtors from being harassed in the collection process. This means they cannot be harassed. It should be noted that this Act protects against those who regularly collect debts but does not include creditors that are collecting their own debts. So this Act only applies if you have hired another company or an attorney to collect your debts.
Not being paid for a service or credit extended can harm a business over time. Because of this, debt collection processes should always be considered when the uncollected debt continues to grow. In order to ensure your rights are protected and you take the right steps, it might be beneficial to seek legal guidance about these matters.
Source: FindLaw, “Debt Collection,” accessed Jan. 6, 2018