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Small
Business Debt Collection Law Cheat Sheet |
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by: Joel
Walsh |
In your
small business debt collection
laws will eventually become important, as your debt grows and some
clients do not pay.
To collect small business debts legally, you must first send a written
notice that collections have begun, within five days of first
contacting the debtor for collections (for instance, within five days
of calling on the telephone). The letter must include dispute
instructions.
Small Business Debt Collection Laws Forbidden Practices
* Collect any amount beyond the actual debt, unless you really can do
so legally.
* Continue collections on a debt if the debtor has disputed the debt,
unless you provide the debtor with written proof.
* Continue contacting the debtor if within 30 days of first contact,
the debtor disputes the debt.
* Credit a payment the debtor has made to a non-disputed debt to a debt
the debtor has disputed.
* Deposit a post-dated check before the post-date.
Small Business Debt Collections Laws: What You Can't Say
* Give a false name.
* You are an attorney or government representative, if you are not.
* You have an attorney working for you or that you are going to assign
the case to an attorney, if you really do not.
* The debtor has committed a crime, unless you are 100 ure they have.
* You work for a credit bureau, if you really do not.
* The debt is more or less money than it actually is.
* You are sending or have sent legal forms when you really did not.
* You are sending or have sent papers that are not legal forms, if they
really are legal forms.
* The debtor will be arrested--no one is arrested for nonpayment of
debts anymore.
* You will seize, garnish, attach, or sell the debtor's property or
wages, if you do not really intend to or cannot legally do so (and
unless the debt is secured with collateral, you probably cannot).
* You will sue or take other legal action, if you do not really intend
to, or are not legally able to do so.
Small Business Debt Collection Laws Forbidden Third-Party Disclosures
Never:
* Give any credit-related information that is not 100
ccurate.
* Tell anyone other than the debtor that you are collecting a debt.
* Telephone any number other than the debtor's more than once.
Small Business Debt Collection Phone Calls
Never:
* Call after 9 pm or before 8 am.
* Forget to give your name and your company's name.
* Call repeatedly or in a way intended to annoy.
* Make a collect call.
* Make any threats.
* Use profane or obscene language.
* Leave a message that reveals this is a debt collection.
Small Business Debt Collection Mailing
Never send:
* Postcards.
* Envelopes or mailings with any reference to debt collection on the
exterior.
* Anything that looks like an official, legal, or government document,
if it is not.
Please note this page is not intended to give legal advice and may not
be complete or up to date with the most current collection laws
changes.
About the author:
Joel Walsh has written more tips on debt collection law: debt
collection law
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