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 send
a written notice that collections have begun, within five
days of first contacting the debtor for collections. 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% sure 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% accurate. Tell anyone other
than the debtor that you are collecting
a debt. Telephone any number other than 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.
These simple small business debt collection laws guidelines
should help stay with the collection laws.
