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Small Collection Claims are Still a Big Deal

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Experienced business owners are aware that while an exchange for goods or services should mean that someone pays for them at the end of the deal, it doesn’t always happen. The first reaction a business owner has when faced with the reality that a past due account isn’t going to be paid is wonder what options there are to deal with the situation.

How about pursuing small claims collection through the court system yourself? Or what about hiring someone to do it for you?

Both of those choices have merit, but is one better than the other?

Filing Suit against a Client in Small Claims Collection Court Can Be an Expensive Nightmare

Many people have the impression that all you have to do to collect a business debt in small claims court is to pay a small fee, present your case to a judge and when it’s over a short time later, you somehow collect the money due to you on your way out the door. But small claims courts are not that simple in the way they work.

In the real world the business owner must first file court documents stating they wish to sue. This takes at least 15 to 30 days to process in some states. Once the debtor has received a summons notifying them of the suit, they have on average 30 days to respond. If they hire an attorney, then the response gets pushed back further. The reality is, in many cases at least 90 days can pass before a trial date is even set.

The sad fact is that when many businesses get this far down the road in small claims collection court, frustration (and fear) sets in and the business owner gives up - walking away from the matter feeling beat up and worn out.

Debt Collection Companies Can Help Even the Smallest Of Businesses

Debt collection companies nowadays are very flexible. Years ago debt collection agencies offering small claims collection services charged a flat fee, or a minimum fee for their service. That was based on what they considered to be comparable to a legal attorney working for one or two hours.

Unfortunately that would not work for a small business trying to collect an amount smaller than the fee. Now many debt collection companies work on a percentage basis, agreeing to collect the debt in exchange for a certain percentage of that debt in return.

Hiring a Debt Collection Company Is a Hassle-Free Alternative to Small Claims Court

When hiring a debt collection agency, there are no small claims collection nightmares. Once you’ve agreed to working terms with the agency, you can just sit back and let them do their job. You’re protected from the debtor taking legal action against you, and the agency will often collect the debt much faster than if you went through the court process.

Because many collection agencies do not charge upfront fees, you don’t pay anything out of pocket, and most collection agencies do not put an end date on collections; that is, they may keep the account on their files and work to collect until you tell them to stop. Hiring a debt collection agency is an efficient and worry-free alternative to small claims collection courts.