Comment by tptacek | Hacker News Reader

Comment by tptacek | Hacker News Reader

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I'm not sure why this is shocking to you; these are all the debtor's problem, not the creditor's. The creditor just wants some return on the debt, and a long-term deterrant to other deadbeats.

I don't know you, but you might be surprised how big an issue this is; back in the '90s, I was a key employee at a regional ISPs, and the deadbeat problem was significant.

The standard answer to this problem seems to be having a lawyer draft a letter (hundreds of dollars) threatening a civil suit, and then actually taking the deadbeat to court. If you think a stern letter will get someone to cough up, this is a fine route to take. If you think it'll require an actual court case, forget it. Business civil suits can take years just to get into a courtroom; if your opponent hires their own lawyer, your odds of winning aren't awesome compared to the investment you'll have to make with your counsel; in the end, if your debtor simply goes out of business, you end up with nothing even if you win.

Deterrent? Why would collecting one debt discourage other debtors? (whoops, I've taken a wrong turn into Alliteration Central).

What I'm getting at is that using a debt collection agency is an exceptionally nasty way to recover money. There are other avenues to explore, one of which was suggested by boredguy8 and another by tjic.

The delinquency letter you send out to deadbeat clients that says you work with XXX debt collection agency to recover fees is likely to get a better response rate than the one that says you'll "pursue all options".

Note also: a good corporate collections agency might know tricks you wouldn't think of to spur repayment. For instance, you can ding people's D&B reports with collections issues (who knew?), which can cause problems for some companies with their other B2B transactions.

Some unrelated case-in-point: I'll pay parking tickets in jurisdictions where they're handled by collections. I won't bother paying parking tickets elsewhere, even when they have hard-and-fast "3 tickets and then we boot you" rules. The collections agency is just a bigger headache than getting a boot off.

I am not disputing the efficacy of debt collection agencies at recovering money, in the same way as I would not dispute the destructive power of a bomb.

You just disputed the idea that a relationship with a collections agency would deter future debt collectors. I responded to that. I'm not arguing about any other problems you might have with them.

I'm sorry, I thought that was what you were arguing when you said:

"The delinquency letter you send out to deadbeat clients that says you work with XXX debt collection agency to recover fees is likely to get a better response rate than the one that says you'll "pursue all options"."

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