Extending Credit & Debt Collection

The decision to extend credit can open doors to new revenues for small businesses, but also comes with debt collection concerns and the need to be mindful of credit laws. Before a business decides to sell goods or services on credit, it should carefully weigh the costs and benefits of doing so, along with what proper debt collection procedures will entail. Once a business has begun accepting credit, careful operation within consumer credit laws is key. Whether you are contemplating accepting credit, need to know about the Fair Debt Collection Practices Act, or how to properly utilize debt collection agencies or lawyers, use the resources below to make smart decisions ahead of time.

Extending Credit:

How to Extend Credit - Selling goods or services on credit can increase sales as long as you establish fair but firm policies, understand consumer credit laws and learn how credit is affected by certain scenarios.
Customer Invoice as Credit - Sending a customer invoice after providing goods or services is an extension of credit, which requires clear payment policies an assessment of a customer's credit risk.
Ten Things to Consider Before You Extend Credit - Whether to accept credit cards, how to obtain credit information, policies for collecting past due and other important considerations regarding credit extension.
Credit Policies: Dos & Don'ts - General advice for drafting effective credit policies that keep customers happy while honoring your financial needs and obligations.
Consumer Credit Laws - Overview of federal laws pertaining to consumer protection of credit information, credit discrimination, fair debt collection and related legal matters.
Credit Practices Rule: Compliance Guidelines - Information about the FTC consumer protection rule governing certain aspects of how businesses extend credit to customers.

Debt Collection:

Debt Collection: Overview - Brief summaries of topics pertaining to debt collection, including debt collection letters, interest on overdue payments, collection agencies and mechanics' liens.
Creditors' Rights & Collection Options - Overview of creditors' rights and the various available remedies for collecting on a customer's debt, including collection agencies, lawsuits and liens.
Two Approaches To Credit & Collections - Examples of two businesses dealing with credit extension and debt collection in different ways, including the use of collection agencies and business lawyers.
The Fair Debt Collection Practices Act - Answers to frequently asked questions about the FDCPA, a consumer protection law regulating how debt collectors interact with debtors.
What Collection Agencies Cannot Do - List of collection agency practices prohibited by the FDCPA, including harassment and false statements.
Collecting Debts Owed by a Bankrupt Customer - Steps to take when a customer in debt goes bankrupt, whether it's Chapter 7, Chapter 11 or Chapter 13.

Tools & Resources:

Collection of Accounts Checklist - Advice for increasing your odds of collecting balances owed by your customers, from late fees and reminders to collection agencies and small claims court.
Sample Debt Collection Letters - Samples of debt collection letters, from the friendly initial collection letter to the firm but still professional final demand for payment.
Sample Billing Dispute Letter - Sample of a billing dispute letter, plus federal guidelines governing the reporting and resolution of a disputed bill.
Taking Business Customers to Small Claims Court - How and where to file a small business claim in small claims court, including dollar limits and preparation.

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