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Hiring a collection agency

Before taking legal action against clients with overdue accounts, consider hiring a collection agency.
By Mari-An Santos |

Handling your business' finances can be a headache. But it's inevitable, if you want to ensure the smooth flow of business. What do you do when you've given notice of overdue account and already sent letters requesting a client to settle the debt? 

When all else fails, you can heed the help of the justice system. But, before you take the long and costly road to legal action, you may consider employing a collection agency to handle it. The collection agency takes on the task of collecting debts for you. This is their core competency, so you might have one less headache if you choose to outsource collection to them.

But when should you decide to contact a collection agency? According to Emmanuel Tuazon, First Vice President of PNB's Consumer Banking Sector, they employ the services of a collection agency "to augment collection efforts for difficult accounts or those who you might need to do personal visits or skip-tracing. For cards, we may begin as early as the 90-day past due dates."



There are so many notions as to what a collection agency does and how it goes about achieving its goal. Ernesto Sanchez of Nobility Collection Agency, Inc., enumerates the services usually offered by agencies such as theirs:

  1. They send out a demand letter to the debtors, followed up by a series of communications.
  2. They provide copies of the letters mentioned above to the collectors for personal follow-ups. 
  3. They can provide the client with the credit standing of the debtor, such as, but not limited to, its history of bouncing checks, broken promises, extending the payment beyond the terms of the purchase order.
  4. They investigate with the different government agencies to check whether the debtor has properties which can be acquired by the client if they can get a court ruling to do so.
  5. They go after the corporate officers if the principal debtor has run away.
  6. They can also perform other tasks requested by the client.


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