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The Massachusetts Supreme Judicial Court released last week that it has altered some of the rules governing the use of small claims courts. The Court said that the changes were created specifically to address the number of debt collection cases that are filed in small claims courts.

The rule changes come on the suggestion of the Small Claims Working Group, a panel of legal experts that was assembled in 2006 to examine and improve current small claims practices. In a press release specifying the changes, the Supreme Judicial Court noted that While the rules apply to all small claims matters, there will be a major impact on debt collection cases. The changes address many of the issues selected by the Working Group in collection cases, and four in particular: increased validity of service, insufficiently detailed claims, increased inspection of default judgments, and notice to the court when a judgment is paid.

Adam Olshan, an attorney with Law Offices, Howard Lee Schiff, P.C. in Worcester, Mass., agrees that some collection law firms will be affected. This will impact the high-volume collection law firms.

But Olshan, who was on the Working Group representing credit card issuers, noted that most collection law firms ” including his own ” do not take advantage of small claims courts. If the plaintiff fails to validate the address, the court may not enter a default judgment if the defendant later fails to appear for trial.

The changes also add elevated scrutiny to default judgments that are entered. New small claims laws require plaintiffs to inform the court in writing when a small claims judgment has been paid in full, or be responsible for any reasonable costs incurred by the defendant in later establishing that it was satisfied.

Another requirement is that the magistrate or judge is to analyze the terms of any agreement for judgment with the parties if they are present in court. This makes certain that the court does not order or otherwise endorse any private payment agreement that relies on exempt sources of income. This avoids any arbitrary surprise to the defendant by delaying any levy on the judgment until the defendant has had an opportunity to pay as ordered or to attend a payment hearing.

The fact of the matter is, the more time that passes between the time the payment was unpaid and the time the customer is contacted, the less likely you are to be given any sort of payment. If you’re serious about making a profit, there are three ways to handle collection on past debt; in house efforts, hiring a collection agency, or taking legal action.

Collecting the debt independently: If the debt is new or small, you’ll in all likelihood start by trying to collect the debt yourself before hiring a collection agency or a lawyer. The most practical way to start the process of collecting an overdue debt is by calling the debtor. Many nonpaying customers can talk a great talk on the phone, but then never deliver. If the business is local, attempt to make an appointment with their finance manager to talk face to face.

Another yielding way to motivate clientele to make a payment is by applying a 10 day demand letter. Some collection agencies offer a free 10 day demand letter service that includes postage and mailing of a demand letter sent on official collection agency letterhead. Many times, this is enough to get your customer to part with their payment.

Hire a Collection Agency: Many small businesses don’t initially think of hiring a collection agency to collect overdue debt, but of the outsourced solutions, a collection agency is usually the most cost effective and gets the best results. With a collection agency, you don’t pay until they collect the debt, meaning that the collection agency is highly driven to find a way to get the customer to pay. Because they don’t get paid unless you do, a collection agency tends to work fast and much more efficient when working on a contingency basis.

Today’s current collection agencies don’t use scare tactics or bully customers. Besides, not all clientle who are behind on payments are deadbeats. When you choose a collection agency, make sure one of its goals is to maintain extreme professionalism and one that fallows the FDCPA diligently.

Taking the legal road: Another idea to collecting a debt is to take legal action whether by taking the debtor to small claims court or by hiring a lawyer to pursue the debtor.

If you’re a business owner or departmental manager who does any kind of collections activities, you’re already pursuing first party collections, though you may not have known it. First party collections means precisely that: attempting to collect on debt for your own company instead of sending your accounts to a third party agency. Any time you make a call asking to remit payment or send a past due notice you’re engaging in the practice of first party collections.

The name “first party collections” means that the entity collecting (or an affiliate was a party to the original transaction. The debtor is referred to as “second party,” and “third party” means another entity that gets involved in the attempts at collection, like a debt collection agency.

First party collections activity has some unique advantages. For one thing, there is no lag in time between an account becoming delinquent and the beginning of the collections process. Also, you have knowledge of your customers’ needs and practices, making it easy to maintain a positive relationship even after debt is incurred, which helps down the road if you want to keep the customer as a client.

Third party collections agencies are sometimes seen as hostile, while if your clients need your product or service to keep his or her business running smoothly, they will strive to stay on your good side. Sometimes just hearing a familiar voice asking nicely for payment is enough to solve the problem.

In addition, first party collections are not governed by the Fair Debt Collection act, believe it or not. This is because under the law the first party or its subsidiary is considered the lender rather than a collector and it means you can do some things that a third party debt collector can’t by law. There are still state and federal laws that apply, though, so make sure you are familiar with all applicable regulations if you go this route.

Most companies handle their own collections for a period of ninety days to six months. Ideally, when the 2-3 month mark comes up and collections efforts aren’t working, it’s common practice for companies to turn over these accounts to a third party agency or “sell” the debt to them, which means the agency pays for the right to keep whatever return they get on the debt.

First party collections are best handled by people or a staff dedicated entirely to collections. Having other members of the staff like your sales force or accounting department is not a good idea. They won’t have the skills, time or motivation to successfully pursue collections as well as collections professionals will.

If you hire an individual or create a department to handle first party collections, however, they can be just as successful as third party collections. If they are knowledgeable in modern collection techniques like private investigation to track down new addresses and phone numbers, offering incentives to get the debtor to call in or working out settlements, first party efforts can be remarkably efficient. When trying to make the decision of which type of collections instruments to use, keep in mind whether you’re spreading your resources too thin or if you have the team in place to do first party collections.

The FTC are to host a round-table to discuss debt collection and arbitration practices Aug. 5 and 6 at the Thorne Auditorium, Northwestern School of Law, in Chicago.

The round-table follows up on the FTCs February 2009 report Collecting Consumer Debts: The Challenges of Change ” A Workshop Report, which advised that the debt collection regulatory system in the U.S. should be altered and remodeled. The report also released a series of regional round-tables to further discuss debt collection litigation and arbitration, next weeks meeting being the first.

The round-table will involve representatives from the collection industry, government officials, judicial system representatives, consumer advocates, academicians and other stakeholders.

On the first day, the round-table will cover litigation topics including service of process, consumer default rates, time-barred debts, evidentiary qualifications, and stresses in collection actions and post-judgment concerns.The second day will cover arbitration topics including the role of consumer choice, consumer arbitration codes and rules of conduct, perceptions of bias, transparency of results and post-decision issues.

Too many consumer attorneys contest collections not on the principle of whether the consumer legally owes the debt, but on very small technical issues, according to Markoff. The FTC doesn’t regulate attorneys. Among the issues ACA International hopes to bring up at the Chicago round-table is the education of consumers regarding statute of limitations for collections, process servers and proper notice for consumers on arbitration issues. NAF agreed to immediately stop accepting cases involving consumer credit.

New Yorks attorney general also announced the filing of a lawsuit against 37 law firms that could potentially overturn 100,000 consumer credit judgments against consumers in the state. The suit also targets two collection lawsuit process servers. In addition to the FTC, NARCA and ACA, others on the round-table will include representatives from Public Justice, the Consumers Union, the Michigan Poverty Law Program, the Michigan Creditors Bar Association, the University of Kansas School of Law, Public Citizen, the Center for Responsible Lending, the Illinois Credit Bar Association, the American Arbitration Association, the AARP Foundation, the National Arbitration Forum and DBA International.

I’m sure every business owner has asked him/her self, what can I do if my customers won’t pay me? Do I hire an in-house person, my accountant, an Attorney? The most cost efficient and effective method is a Debt Collection Company.

I am going to highlight one collection agency in particular Rapid Recovery Solution, Inc. Rapid Recovery is a Full Service, Attorney Based Debt Collection Agency servicing customers on a multinational level. RRS has 750 offices in 360 cities in 60 countries. Many locations allows for easy skip-tracing. RRS understands uncollected accounts directly affect your bottom line. Rapid Recovery Collection Agency knows this basic business fact. They also know that businesses work best in 30-day revenue cycles.

RRS works with companies of all kinds. A sampling of some of the types of business they have collected for: corporate accounts, educational facilities, telephone companies, utility companies, taxes, bad checks, repossessions and even bank cards. This list validates they have experience in many fields. A free service they provide: credit bureau reporting, skip-tracing and effective dunning notices.

They will even have different plans they can offer your past due customers. This will enable your customers to pay on a timely basis. In turn, you and the customer will be happy.

The collection method in a nutshell.

First, RRS enters the debtor into their software. The 1st demand letter is sent out. A phone call is made and/or a fax/email is also sent.

If RRS has been unsuccessfull in the previous attempts they send a 2nd notice. Phone call will continue.

If necessary, the credit bureaus will be contacted about each past due account, if this is want the client wants. This will be discussed first.

If the debtor has not responded RRS will send a certified final demand letter.

RRS tries to simplify the payment process by offering payment via Check by phone and Paypal.

When it warrants, each file will be updated every thirty days, especially when customers do not make the payments as promised.

Rapid Recovery Solution, Inc. will do everything possible to see that their clients get their money. If you are interested in learning more about their operations you can reach them at: 80 Orville Drive suite 100, Bohemia, NY 11716 and by phone at 631-776-8109

or visit them here: http://www.RapidRecoverySolution.com

Remember if your customers do not pay you, you won’t make any money. Consider contacting Rapid Recovery Solution, Inc. today if you are having collection problems.

During these tough economic times a lot of people and businesses are having a hard time paying all their bills and staying afloat. Collection agency’s are in high demand right now. It looks as if every day there are 100’s of new people and companies who need a hand in getting their debt collected.

While the debt may be coming in at a rapid rate to collection agencies, it does not mean the debtors have the money to pay the debt. So what is a collection agency to do to get the debt collected?

Well it all comes down to a matter of class! How is your collection agency behaving towards your debtors? Are they yelling and screaming at them? Telling them they are going to sue them and take everything from them down to their underwear?

Or is your Collection Agency talking to your debtors with respect? Letting them know that things are hard right now for everyone? By having your debtors hate the collection agency, and now you, is not going to encourage a debtor pay their bill any faster.

The key is an agency that will assist the debtor. One that will find out how much money they have and what they can do? Most companies would rather have their money come back to them at a slow pace over time, rather then never getting the money back at all and having a past loyal customer now hating them!!!

Times are tough for us all, if we work together we can all come threw this recession with pride and dignity!

Last month, Manuel and Luz Fausto won one of the largest collection awards documented in the last couple of years under the Fair Debt Collection Practices Act (FDCPA) against Credigy Services Corporation. A California jury awarded the Faustos $500,000 in damages stemming from harassment by Credigy collectors. Of the sum, granted $100,000 was for actual damages the Faustos experienced, while $400,000 was in punitive damages, granted for malicious and reckless disregard of the couples rights. According to one of the Faustos lawyers, David Humphreys of Humphreys Wallace Humphreys, P.C., and the case stemmed from a debt on a Wells Fargo charge card opened in 1992.

Humphreys stated that the Faustos routinely paid the account balance on the credit card, but the balance kept increasing. The Faustos then requested that the account be frozen, but their request was declined by a local Wells Fargo branch. Humphreys said the Faustos received help in paying the balance from a local business that promised to negotiate a discounted payoff of credit card balances. The Faustos were under the impression that the debt owed to Wells Fargo was paid off with two money orders in the late 1990s. In 2006, Credigy contacted the Faustos with a demand of almost $17,000. Humphreys noted that a Brazilian affiliate of Credigy made over 90 threatening calls and sent numerous letters to the Fausto home, even after a cease and desist notice was sent to the company.

Luz Fausto recorded the last phone call made by the debt collectors, which documents false claims that threatened the Faustos livelihood. Credigy counter sued the Faustos on the grounds that the debt collection call was confidential. Humphreys said that Credigys collection efforts did not cease until a lawsuit was filed. Humphreys claimed that the jury award was the largest given to a consumer in a case brought under the FDCPA.

Manny Newburger, an attorney for debt collectors fears that consumer lawyers may make the false assumption that all juries will award large damages because it was awarded in this case. The Fausto case is fact-specific, Newburger stated. In the vast majority of cases there is little or no evidence of actual damages presented by the consumer. This is one reason why other debt collection lawyers are not inclined to let the verdict in this case affect their evaluation of other cases, he noted.

Newburger said that the defendants in this case sued for invasion of privacy, a common defense but also, a theory that is asserted in a lot of the cases filed around the country involving alleged collection abuse and the jury ruled against the defendant in the invasion of privacy claim. According to Newburger, the verdict was based on state legislation. This is a California specific case, he said.

Newburger argues that the only thing the Fausto case means is that the consumer won. He does not think the size of the award will entice more consumers to sue debt collection agencies. I think this verdict is indicative of what this jury thought of this particular case, but not of anything else, Newburger said. As for the size of the jury award, Newburger said that he had heard of larger rulings in FDCPA cases.

The ruling for the statutory penalty is still undecided. Once decided, a judgment could be granted for any sum up to $1,000 for Credigys violations of the FDCPA. It is unknown if Credigy will appeal the ruling. The lawyers for the debt collection agency could not be contacted.

Are your bills unpaid and piling up? You are probably getting plenty of annoying phone calls from creditors. It’s bad enough to know you can’t pay your bills, but even worse when the collection calls keep coming in. Is there any way to free yourself from the calls and get out from under the mound of debt?

The answer you need may be this: debt consolidation. Have you considered refinancing your debt and having one easy and manageable payment each month? Imagine having the collection agencies stop calling, and not having to screen your calls.

Debt consolidation can wrap up medical bills, personal loans, credit cards, student loans, or other debt into a more manageable payment per month.

Usually, consumers must get a secured loan to help lower the interest rate enough to benefit from debt consolidation, but this is not always the case. If you are primarily suffering from loads of credit cards maxed to the hilt, then it may be possible to work with a credit counseling agency to learn about debt consolidation. The options are out there if you know where to look.

Finding an appropriate method to consolidate your debt may be tricky, but with a little hunting and pecking through lenders and debt agencies, you should be able to tackle the task at hand. Debt consolidation will allow you to pay off your debt to the companies in a reasonable amount of time at a payment that you can afford.

By making timely payments, you will be able to watch your debt diminish. As if this feeling wasn’t enough, you will no longer be bothered by those annoying phone calls trying to rack you with guilt for being behind on payments.

After consolidating your debt and finding your financial situation improved, you will find relief. Your stress level will become more manageable and healthier, as the collection calls stop coming in.

To get started, gather up your bills and begin doing research. You will want to lower your monthly payment amounts in order to help make your budget more manageable. Debt consolidation can improve so many areas of your life, and help your stress level when those phone calls stop coming in.