Achieve Greater Success With Debt Collection Services – Understand Terms , Part 7
No two debt collection cases are the same. Every one of them requires its own strategy and different terms to ensure successful results. To help you understand the world of debt collection services and make informed decisions, we have prepared a comprehensive list of most common debt collection terms, as well as their translations into French, Spanish and Italian.
This guide will help you better understand what debt collectors do, their role in the process and how to use them effectively. We will explain the meaning of such concepts like ‘Remittance’, ‘Statute of Limitations’ or ‘Credit Insurance’, as well as provide keyword variations to find more information. And the most important thing: you will learn how to translate commonly used keywords into French, Spanish and Italian to better understand international customers.
With this guide from Collecty – a leading international debt collection agency – you can achieve greater success with your debt collection services!
How to send a business client to collections
When you have a client who has failed to make payments on time, getting them to pay may seem like an uphill battle. But, don't give up hope just yet! Establishing a clear process and understanding the right terms used when sending a business client to collections can help maximise your chances of success.
Before engaging in a debt collection process, it is important to become familiar with the terms and translations. Here are some of the most common debt collection terms:
- Charge-off: When payment on an account has not been received within 180 days from the expected due date, it is considered “charged off” by the creditor or lender.
- Collection notice: This is a document sent by a creditor informing a debtor that their account has been sent for collection and that they must pay what they owe or face legal action.
- Debt settlement agreement: This is an agreement between a debtor and creditor that settles an unpaid debt for less than what is owed.
In addition, if you are targeting French-, Spanish- or Italian-speaking customers, it can be useful to provide translations of these keywords as well. For example, charge-off translates into French as “dépréciation”; Spanish as “castigo”; and Italian as “svalutazione”.
What to do when a customer does not pay or reply to reminders?
When a customer fails to pay or respond to your reminders, it can be difficult to figure out what the next steps should be. To help you understand how best to manage these situations, here are some of the most common terms and translations:
Debt Collection: Debt collection is the process of attempting to recover money owed by individuals or businesses.
Reminder Letter: Reminder letters are sent when payments are overdue in an attempt to encourage payment. There are various versions of reminder letters depending on how late the payment is and how many reminders have been sent already.
Formal Notice of Default/Demand for Payment: The formal notice of default or demand for payment is one step further than a reminder letter and should be issued when payments are significantly overdue. This type of letter may also inform the customer that legal proceedings could start if they do not make full payment within a certain timeframe.
Translations:
- French - Recouvrement de dette / Lettre de rappel / Avis formel de défaut / Demande de paiement
- Spanish - Cobro de deudas / Carta de recordatorio / Notificación formal de incumplimiento / Demanda de pago
- Italian - Riscossione del debito / Lettera di sollecito / Avviso formale di inadempimento / Richiesta di pagamento
What does a collection specialist do?
When called upon, a collection specialist will assist debtors in understanding the details associated with their debts. Their job is to ensure that they understand all of the terms related to their legal obligation and that they are aware of any potential avenues for repayment.
A collection specialist will first explain any additional costs associated with collection, such as interest or late fees, and also provide payment options available to the debtor. They will also explore potential solutions to the situation, such as debt settlement or consolidation. Finally, they will verify all information provided by the debtor and work with them to come up with a satisfactory plan for repayment in order to avoid legal action.
In addition, it is important for debtors to understand some of the most common terms used in the debt collection process:
- Delinquency: When payments on an account are not made by the due date. In French: 'défaut de paiement', In Spanish: 'morosidad', In Italian: 'morosità'.
- Charge-off: an account which has been written off as uncollectible by a creditor. In French: 'radiation de compte', In Spanish: 'desechar una cuenta', In Italian: 'scritturare un conto'.
- Write-off/Write-down The liquidation of a debtor's debt through removal of bad debts from an account receivable ledger. In French: 'radiation de dette', In Spanish:'escritura de baja', In Italian:'scrittura di svalutazione'.
What are business to business debt collection rules?
The collection of B2B debt can differ from the collection of consumer debt, which is why it’s important to familiarise yourself with the different rules and regulations that apply.
Statute of Limitations
Also known as limitation period, a statute of limitations sets a time limit on when a debt can be collected. This varies from state to state and country to country, so it’s important to research the time limit for your particular jurisdiction. In French, it is known as la Prescription; in Spanish as el Plazo de Prescripción; and in Italian as il Termimine di Prescrizione.
Demand Letter
A demand letter is a formal notice to the debtor, expressing an intention to collect on a debt that remains unpaid. It typically includes information such as the amount due and when and how payment should be made. In French, it is called une Lettre de Mise en Demeure; in Spanish it is known as una Carta de Exigibilidad de Pago; and in Italian, una Lettera di Inadempimento or Sollecito di Pagamento.
Debt Collection Agency
A debt collection agency works on behalf of creditors or companies to secure payment for debts that are past due. They are typically highly-experienced professionals who employ various methods (such as telephonic contact) to secure payment while also respecting the rights of debtors. In French they are referred to as une Agence de Recouvrement; in Spanish they are know as una Agencia Cobradora; and in Italian they are referred to as un'A
Details about the debt collection industry statistics in the USA
The debt collection industry is rife with statistics and trends. Studies show that the number of consumers facing collections has risen in recent years. In 2018, the Federal Reserve reported that more than one in five Americans had at least one delinquent debt on their credit report.
In addition to rising delinquency rates, the amount owed by consumers also continues to grow. According to Experian, the average consumer debt increased 3% in 2020 compared to 2019, with per-consumer balances rising from $26,607 to $27,475.
Transparency and accuracy are key components of successful debt collection services in the USA. That is why having a comprehensive understanding of the latest terms and trends in the industry is crucial for any successful debt collection professional:
- Default: This term refers to a borrower's failure to fulfil their financial obligations according to the agreement they have with their lender. Possibilities for translations include “défaut,” “incumplimiento,” and “inadempimento”
- Charge Off: The creditor considers an uncollected amount as a loss after it is over 180 days past due. It can be translated as “escrituración de la deuda,” “cession des créances” and “cedimento del credito”
- Debt Collection Agency (DCA): An organisation that collects debts on behalf of another entity such as a bank or creditor. It can be translated as “agence de recouvrement de créances”
Why internet users mostly type "help with collection debt" ?
When someone owes you money, it's likely that the last thing on your mind is terminology. But, if you want to do a thorough job of collecting the debt, understanding key terms and variations can make a huge difference in getting results.
The most common search phrase associated with debt collection is “help with collections debt”– and it's no wonder: if you're looking for assistance with your debt collection efforts, you'll want to be as clear as possible. To understand why people typically search this term, here are some frequently used keywords related to debt collection services:
- Debt Collection – This term is used to describe the process of recovering money that is owed by another party.
- Debt Recovery – This term is used to refer to the same process as above, though it has more of a focus on actually recovering debts rather than simply collecting them.
- Debt Management – This term refers to the overall process of managing debts and payments from creditors and other third parties.
- Credit Control – This term describes the practise of controlling credit by setting limits and monitoring payments from customers.
It's also important to note that these terms may have different translations in other languages- for example, in French, Spanish and Italian:
- French: Recouvrement de dettes
- Spanish: Recuperación de deudas
- Italian: Recupero crediti
By understanding all of these terms and their translations, you can ensure that your debt collection services reach those who need it most—both domestically and internationally!
How to send an unpaid invoice to collections?
When an unpaid invoice has reached a certain point, it may be time to send it to a debt collection agency. Here is what you can expect:
Arrange Payment Plans
The debt collection agency will contact the debtor and attempt to arrange for payment of the outstanding debt, whether through a single payment or through a payment plan. Payment plans may include instalments over time, or payments agreed upon at regular intervals.
Enter into Negotiations
A negotiation process may begin in order to settle the debt for an amount less than what is owed. This could involve reduced payments, interest rate reductions, or some other form of financial agreement that is acceptable to both parties.
Request Assistance from Registered Agents
An agency may enlist the help of registered agents in order to locate and contact the debtor. This process involves researching public records, contacting previous employers and landlords, and other activities designed to locate the debtor and serve them with legal documents if necessary.
In French: Arranger des plans de paiement; entrer en négociation; demander l'aide d'agents inscrits
In Spanish: Establecer planes de pago; entrar en negociaciones; solicitar la ayuda de agentes registrados
In Italian: Organizzare piani di pagamento; entrare in trattative; richiedere l'assistenza di agenti registrati
5 Facts About debt collection agency services in the USA
In the USA, debt collection agency services are gaining more importance as businesses strive to recover their unpaid debts through legal and ethical means. Here are five facts about debt collection agency services in the USA that will help you understand their importance:
- Reasonable efforts: Debt collection agencies must make reasonable efforts to contact debtors and settle the debt. This includes making clear and valid requests for payment and sending reminder letters.
- Fair practises: Debt collection agencies must abide by fair practises, such as not communicating with third parties about the debt and not using profane language when speaking with the debtor.
- Timely response: Debt collection agencies must respond promptly to communication from the debtor or their attorney, or face penalties for noncompliance.
- Payment terms: When making a payment offer to a debtor, a debt collection agency must provide clear terms of payment and an explanation of any fees due.
- Foreign language translations: When dealing with foreign clients, debt collection agencies must provide foreign language translations of all relevant materials, including any payment documents or contract amendments. (Keyword variations in French, Spanish and Italian: Collection de dettes/Cobranzas/Recupero del credito)
What does receivables management means?
Receivables management is a process of tracking and collecting incoming payments from customers. It helps to ensure that customers pay their invoices on time and businesses are not affected by late payments. The receivables management process includes the following steps:
- Identifying outstanding payments
- Contacting customers to ask them to make payment
- Reminding customers of their payment obligations
- Negotiating repayment terms with customers
- Recouping unpaid invoices through legal action
This fundamental process for debt collection is known by different names around the world, including Gestion des Créances in French, Gestión de Cobros in Spanish, and Gestione dei Crediti in Italian. By understanding debt collection terms and the various translations associated with them, you can ensure that your debt collection operations run smoothly on an international level.
What is an international debt collector?
An international debt collector is a person or agency that collects unpaid debts from international debtors where the creditor resides in different countries. They will typically attempt to do this through phone calls, emails, letters, or even legal action.
International debt collectors have the authority and ability to assist with the collection of debts in various languages, allowing them to bridge any language barriers when communicating with debtors in other countries. This can be beneficial in cases where language barriers pose a problem for creditors attempting to collect on their own. They also typically have access to specialised databases and resources which can help them in their efforts.
Furthermore, international debt collectors are educated and familiar with laws surrounding cross-border collections, making them well equipped for the task of recovering debts from foreign parties. Keywords for this concept include:
- International Debt Collector
- Cross-Border Collections
- Foreign Debt Recovery
- Global Debt Collection Agency
The translations for these terms into French, Spanish and Italian are as follows:
- French: Recouvrement de dette internationale
- Spanish: Agente de cobros internacionales / recuperación de deudas internacionales
- Italian: Agente di riscossione dei debiti internazionali / recupero crediti internazionale
How to convince customer to pay their debt?
When attempting to collect a debt, it can be difficult to determine the best course of action to convince the customer to pay what they owe. There are several different strategies you can use, but it is important to remember that each situation is unique and may require a customised approach.
The following are some of the most common debt collection terms and tactics:
Good-Faith Negotiation
This involves trying to reach an agreement between both parties by discussing the expectations and potential solutions in good faith. This may involve offering a reduced or extended payment plan or making some other kind of compromise.
Letters of Demand or Formal Requests for Payment
These are typically sent via registered mail, as this is the most certain way of ensuring that the customer has received notification and cannot claim they were unaware of their obligations.
Court Action
This is an option if you have exhausted all other possible methods of collection and usually involves filing a debt claim with your local court and having them decide upon how much is owed.
Variations/Translations:
French: Négociation de bonne foi/Lettres de mise en demeure/Action en justice Spanish: Negociación de buena fe / Cartas de exigencia / Acción en los tribunales Italian: Negoziazione di buonafede/Richieste formali di pagamento/Azione legale
An example of effective debt collection method
The most effective debt collection method is the use of reminders. Sending out regular reminders to customers about outstanding invoices can help keep them on track and motivate them to pay. People often feel overwhelmed by their debt, so if they can set themselves a repayment plan that's easy to stick to, they're more likely to be successful.
By sending regular reminders, you can show them it's not only manageable, but also beneficial for their future financial stability. Make sure they understand that this repayment plan is in their best interests and will help them gain control of their finances in the long term.
In addition, use relevant keywords when communicating with customers - this could help them better understand the importance of paying off their debt quickly. Some common terms you should know are:
- Arrears - payments that have become overdue
- Keyword variations: arrearage, arrears balance
- French translation: arriérés
- Spanish translation: atrasos
- Italian translation: arretrati
- Default - not meeting your payment obligations for a period of time as specified in an agreement
- Keyword variations: fall behind, delinquency
- French translation: défaut de paiement
- Spanish translation: impago
- Italian translation: default
What is needed to place an account with a debt collection agency?
If you're ready to engage a debt collection agency, it's important to understand the information they will need in order to efficiently and effectively take action on your behalf. Here's a look at some of the most common terms used and what they mean:
Invoice Number
This is the number that appears on the invoice sent to your customer and must be supplied in order for the debt collection agency to quickly and accurately identify the account.
Overdue Balance
The overdue balance is the amount still owed after subtracting any payments already made. This is also known as “outstanding balance” or “past due balance.”
Payment Deadline
The payment deadline is when you expect to receive payment or when payment was due according to the original agreement. It's vital that you provide this date and ensure it falls within any legal requirements of your country or state, as this helps ensure a successful outcome.
When set, these terms may vary slightly depending on language, so be sure to include translations such as "invoice number" (Numéro de facture, Número de factura, Numero fattura) "overdue balance" (Solde impayé, Saldo vencido, Saldo scaduto), and "payment deadline" (Date limite de paiement, Fecha límite de pago, Scadenza pagamento). By setting up your terms with precision from the start, you can increase your chances of successful debt collection outcomes.
What does delinquent account means?
A delinquent account is a financial obligation that has gone past its due date without being settled. This term, which is also known as an overdue or past due account, can arise from credit cards, mortgages, and loan payments that have not been fulfilled. Delinquent accounts can not only harm a consumer’s credit score, but also negatively affect a creditor's chances of getting their money back.
In some countries, the word 'debtor' may be used to refer to someone who has delinquent accounts. To avoid confusion between the debt collector and debtor, it is important to use the correct terminology.
In other languages the term 'delinquent account’ may have different variations:
- French: Compte impayé
- Spanish: Cuenta morosa
- Italian: Conto insoluto
Understanding the key terms used in debt collection services is critical for businesses around the world. An accurate and complete understanding of the meaning and possible translations of debt collection terms can be a powerful tool to successfully collect unrecovered business debts. Collecty is here to help you make the most of this tool. With over 25 years of experience, we provide reliable, efficient and cost-effective debt collection services. Whether you are a small business looking for guidance on how to collect a business debt, or a large corporation in need of a reliable collection agency, Collecty’s team of professionals will help you to get the results you need. Contact us today to get started.
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