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Sending Someone to Collections – How to Do It

How to Send Someone to Collections

Sending someone to collections is a colloquialism used to hire a collection agency to recover an unpaid debt.

When sending to collections, the agency takes a portion of the outstanding debt as their fee. The benefit of taking this course of action is the responsibility of recovery is out of your hands.

Writing off a bad debt means not only losing money but losing the time you put into the project. Here’s what you need to know about how to send someone to collections and selecting a suitable collections agent for you.


What Does Going into Collections Mean?

When you hire a debt collector to recover an outstanding amount, you send a delinquent account into collections.

This is the last-resort solution when all other options have failed. If you’ve already exhausted all other means of recovering outstanding debt, hiring a collection agency for personal debt or business debt is the answer.


What to Do Before Sending Someone to Collections

When deciding whether to hire a collection agency to collect a debt, it’s best practice to follow a step-by-step procedure.

Most experts agree that creditors should wait a minimum of 90 days before sending an account to collections. Looking into how to send someone to collections before the 90 days are up is considered an overreaction in most circles.


Step One – Resend Outstanding Invoices

Many clients are busy, and invoices go missing. Or, their email provider might have redirected your invoice to their spam folders.

Resending outstanding invoices often has the desired effect. Plus, many clients see an invoice on Friday, vowing to pay it on Monday and then forget about it.


Step Two – Speak to the Debtor

Sending an email or calling a debtor can straighten out the issue quite quickly. Speak to the client about any potential cash flow problems they might have.

Help your debtors by offering a payment plan both sides can agree to. This can improve your relationship with your client and boost your reputation.


Step Three – Contact a Lawyer and Send a Formal Demand

If none of this has worked, or the debtor has pulled a disappearing act, it’s time to consider more formal action.

Contact a lawyer in your area and request them to draw up a demand letter. This is a formal letter detailing the consequences of non-payment. Many nonpayers have paid up out of fear of proper legal action. Be careful here. Do not threaten legal action without consulting an attorney.

When Should You Hire a Collections Agency?

Assuming you have followed all the above steps, it may be time to call in a collections agency. But you may be wondering how to turn someone over to collections and whether it’s the right decision for you.

Firstly, it’s much more affordable to figure out how to send a bill to collections than it is to hire an attorney and take the issue to court. For smaller amounts, it’s often not worth it to go down the legal route.

It’s also a better option to hire a debt collection agency if you don’t have the staff or expertise on your side. Hiring an agency may mean not receiving the full debt back, but experienced professionals specialize in recovering debts large and small.

Depending on the amount, even recovering a portion of the debt could make a big difference to your cash flow.


Finding the Right Collection Agency

There are no Federal laws on collections agent licensing. The majority of states require debt collectors to hold a license, but not all of them. Furthermore, it’s not difficult to get a license. Any one-person operation can obtain a license if they hold a valid driving license.

The best collection agencies operate on reputation alone; before asking, “How do I send someone to collections?” think about whether you have the right agency in mind.

An effortless way of finding a reputable collections company that’s professional and does things by the book is to look for the Better Business Bureau (BBB) accreditation. BBB businesses have all been verified for legitimacy and are adequately insured.

Additionally, collection agencies live or die on their word-of-mouth reputation. Ask others in your personal and business circles for recommendations.

Personal experience trumps everything else. If you don’t get any recommendations, look online for reviews from previous customers.


Average Collection Agency Fees

It’s difficult to say how much an agency will charge. The fee depends on the industry, the debt’s age, and how much the agency already knows about the debtor. Average fees range from 18%-50%.

Even if only a portion of the debt is recovered, you’ve lost nothing on fees. While it may be tempting to sell the debt, debt buyers will typically pay pennies on the dollar, so it’s rarely worth it.



If you’re wondering how to send someone to collections, contact the Collections Bureau of America. We have a 50+ year history and a license to collect debts in all 50 states.

Wondering whether it’s time to call in the professional debt collection agency? Contact us today for a consultation.