Risk Management in Credit

Credit Risk

Credit risk is the "chance" or probability that one will lose what they have loaned to another, or will lose some form of financial reward for loaning money, if the debtor fails to meet their obligation to repay the debt.  IN our industry, credit risk tends to be as straight forward as a debtor not paying their past due bills.

Credit Risk Management's goal is to have a policy and practice in place that allows the extension of credit to customers or clients that will maximize revenue, and will minimize the probability the  a customer will default on the debt.  Its a balancing act between getting as much sales, weighed against the risk of customer default.

There are 4 major ways to manage credit risk:

1  Avoid the risk.  Simply don't extend credit.  Of course, that negates the first part of the goal, maximizing revenue.

2.  Control the risk.  Create a detailed plan to reduce risk, and cary it out, using your receivables department to monitor and manage the credit to your consumer.

3.  Accept Risk.   Some businesses say.."well its the cost of doing business" and simply accept a certain percentage of defaults.  These businesses tend to be companies pushing into new markets, ones with high profit margins, or companies at risk themselves and pushing an "all or nothing" agenda.

4.  Transfer the Risk.   This strategy can be expensive but effective.   Transferring risk can be done by using a factoring company to "sell" your receivables at a reduced face value for the benefit of immediate cash, or using an credit insurance company.

When the risk pendulum has swung to the wrong side, and its time to call in the debt collection attorneys, Marcadis Singer, PA stands ready to support you collecting from your debtors in Florida.

Marcadis Singer, PA

Florida Collection Attorney

5104 South Westshore Blvd.

Tampa, Florida 33611

info @ marcadislaw.com

(888) 547-1881

(813) 288-1881

New Clients 

Ext. 247 Gil Singer

Ext. 240 Ralph Marcadis

Existing Client Client Liaison

Ext. 242

To Pay a Claim

Ext.  245

5 Fast Credit Destroyers

Large Balances on your credit cards

• Even if  you are current, having high balances increases your risk of “potentially” missing  a payment.  Keep your credit utilization to 30% or less of your lines of credit.

Ignore your spouse's credit

• While your scores may be separate, all joint accounts will impact both of you.  Some try to manage this risk by having everything in one name or the other.  This weakens your combined credit worthiness when applying for credit like a mortgage. 

Sudden mass credit activity

• Get several new cards at once because your credit score improved?  Close several accounts at once because you got a windfall, and have the cash to pay them down?    It is better to move slowly, Pay down cards, but keep them active to show how well you manage credit.

Co-sign for friends and family

• Now you put your credit worthiness in the hands of someone else.  If you cosign – it shows as your credit – and – if they miss a few payments, it reflects on you, even if you don’t know.  If you are helping a son or daughter build credit by co-signing – make the payments yourself, have them reimburse you.

Ignore your credit score

• The law entitles you t o a free credit report once a year.  You should check every few months.  An accidentally missed bill, or a bill reported to your credit that’s not yours, can impact you negatively for a long time. 

Marcadis Singer PA are debt collection attorneys, supporting the entire state of Florida.  We encourage you to pay your debts on time, preserve and manage your credit.  If you are behind, and contacted by a debt collection attorney, don't ignore them, work with them.  It is our goal to resolve the debt, not destroy your credit.  If you are owed money, and need to collect, call us.  Let's evaluate together wether it is time to call in the debt collection attorneys, or see if there are other avenues available to you.

Marcadis Singer, PA

Florida Collection Attorney

5104 South Westshore Blvd.

Tampa, Florida 33611

info @ marcadislaw.com

(888) 547-1881

(813) 288-1881

New Clients 

Ext. 247 Gil Singer

Ext. 240 Ralph Marcadis

Existing Client Client Liaison

Ext. 242

To Pay a Claim

Ext.  245

Finding Debtors

Debt Collectors Will Find Debtors – Skip Tracing

When you have someone trying to avoid you, that owes you a debt, professionals in the debt collection industry have a sweet of tools that can help to find that person, and collect on your debt.

Information provided by the debtor

There is usually information about a debtor both in correspondence and transactions with the creditor and on their original credit application.  Debt collectors prefer this type of information, as it is readily available.

This information can include:

·      Relative not living with you

·      Personal Guarantees

·      Addresses from deliveries

·      Email trails

·      Order history.

Credit Reports and Scores

A debt collector can easily retrieve credit scores to judge a debtors ability to pay a debt, and pull credit record to see where else a debtor owes money, where debtors have had charge offs, address history, different variations of the debtors name, and a host of other information making it possible to track down a debtor hiding from creditors.

Commercial Databases

From Whitepages.com to LexisNexis Accurint and SearchAmerica, there are a host of easily accessible databases that can track down where a debtor can be contacted.  Some databases go so far as to create a model of how likely a debtor is to pay certain types of debts based on their payment histories.

There are also services that aggregate data from multiple sources from as far flung as contest entries to as rational as change off address notifications.

Social Media

Imagine telling a debt collection professional about how you can’t afford to pay a debt, while they are viewing a Facebook page with pictures of a Caribbean Cruise, or telling a debt collector that you have no assets, when there is a picture of a beautiful jewelry purchase recently made on the debtors social media accounts.

Something as basic as liking a bank on Facebook can give a debt collector clues as to where a debtor banks.   Some debt collection companies consider Social Media “off limits” however if the information is in the public, at the moment it is fair game.

Debt Collection Search

It is the job of a debt collection professional to use all means at their disposal to retrieve money legitimately owed by a debtor.   With experience, in today’s digital age, that data is available from an astounding array of sources.

The simple truth of the matter is, a debtor owes money; they have an obligation to pay it.  The days of being able to easily hide from a debt collection professional are very limited.

Marcadis Singer, PA will put all necessary resources to work in collecting legitimate debts.  Hiding assets, or hiding how to contact a debtor is no longer an easy task.  Often times, simply letting a debtor know how much you know about them and their spending habits can be enough to gain a quick settlement of outstanding debt.

5 Smart Uses For Credit

A handy Infographic to go with our previous article Smart Uses For Credit.

Debt Collection Attorney, St. Petersburg, FL

Tampa's neighbor across the bay is St. Petersburg, Florida.

Marcadis Singer, PA are very active in collecting debts on behalf of our legal clients in St. Petersburg.

In most matters related to debt collection in St. Petersburg, we rely on the sixth circuit court.

St. Pete, is a gorgeous city, but has also seen its share of hard times during the recession.  We often take the quick trip across the bay when court action is called for in collecting a debt.

Please enjoy our brief collage about the city of St. Petersburg.  It is one of our most favorite towns, and we are debt collection attorneys in St. Pete, Clearwater, and all of Pinellas County.

Marcadis Singer, PA

Florida Collection Attorney

5104 South Westshore Blvd.

Tampa, Florida 33611

info @ marcadislaw.com

(888) 547-1881

(813) 288-1881

New Clients 

Ext. 247 Gil Singer

Ext. 240 Ralph Marcadis

Existing Client Client Liaison

Ext. 242

To Pay a Claim

Ext.  245

Debt Collection - Not "Going it alone"

All businesses evolve, and all business practices evolve over time.

The Debt Collection industry has been under waves of enormous change.  The change has been coming from multiple directions.

The recent recession in the US has left more people than ever, unable to pay their bills, at the same time, businesses need the cash flow more than ever from the money they have extended.

The affordable care act is pouring more people than ever before into health institutions, where patients that might have foregone care altogether will new have deductibles.   In yesterday's blog we outlined some of the ways this has impacted the collection of debt for not for profits.

The legislative tone has swung like a pendulum to protect debtors, we are not in a creditor friendly legal environment.

At the same tim, from within and without the debt collection industry there is a growing intolerance for the heavy handed tactics that used to play in the industry, and that have given those of us that are legitimate professionals a black eye.

Change - we hear from many in our industry how "horrible" this is, how the debtor can "get away" with anything, how "business" will have no choice but to tighten their credit policy because of how difficult it is to get paid.

We, at Marcadis Singer, look  at this set of change differently.  We are attorneys and required to live within the law and protect our clients' interests.  Our firms focus is debt collection.  As the environment for debt collection becomes more and more constrained and controlled, the need to have a proactive and focussed debt collection attorney becomes more and more necessary.  It is far too easy for someone needing to collect a debt to make a misstep.  One miss-step in today's environment could end the creditor in legal trouble.  Never-mind that they stand a chance of not collecting, but a creditor can end up facing fines and penalties for using improper debt collection process.

We are no longer in an environment where a creditor can "go it alone".    Now more than ever, getting the money you are owed is critical.  Now, more than ever, getting the money you are owed is more difficult legally.  Now, more than ever, its time to establish a relationship with a law firm whose major focus is on the collection of debt.  A firm that can protect your legal interests in the money that is owed to you, and a firm that has the resources to keep up with the ever changing legal landscape around creditors rights.

Marcadis Singer, PA is neither for, nor against, the massive changes in our legal ecosystem around the collection of debt.  We are pragmatists.  The nature of the way creditors can collect debt has changed, it is more difficult than ever before, and he penalties for straying outside the lines are more harsh than ever before.  That means, that we need to work harder, this means that many in our industry that don't have the resources to keep up, will drop out of the industry and pursue other opportunities.  Mostly it means that the individual or business that is owed a significant sum of money cannot "go it alone".

Marcadis Singer, PA, debt collection attorneys for the entire state of Florida, ready to meet the challenges and opportunities of our ever changing industry.

Marcadis Singer, PA

Florida Collection Attorney

5104 South Westshore Blvd.

Tampa, Florida 33611

info @ marcadislaw.com

(888) 547-1881

(813) 288-1881

New Clients 

Ext. 247 Gil Singer

Ext. 240 Ralph Marcadis

Existing Client Client Liaison

Ext. 242

To Pay a Claim

Ext.  245

Hospitals Halt Extraordinary Debt Collections

It's a sign of the times in the tightening of how debt can be collected.

http://www.forbes.com/sites/insidepatientfinance/2014/01/16/hospitals-ordered-to-halt-extraordinary-debt-collection-for-now/



Not-for-profit hospitals have been ordered to stop "extraordinary" debt collection unless they can clearly show the patient does not qualify for financial assistance.   gthe industry waited over a year and a half for the IRS to come up with final regulations.  

Now Patients have roughly 6 months from the time of service to decide wether or not to apply for financial assistance, they then have another 6 months to complete the paperwork.  During that period, hospitals can no longer go to "extraodinary" measures to collect on the past due debt.

This applies to Not-For Profit Hospitals only.

This is an offshoot of the Affordable Care Act.  The Affordable Care Act requires not-for-profit hospitals to have "reasonable billling and collection rquirements" but it never defined reasonable.

The new definition is a negative definition.  Instead of defining reasonable, it defines what is Extraordinary, and therefore forbidden.

Specifically, the regulations prohibit nonprofit hospitals from engaging in “extraordinary collection actions” for up to 120 days after the patient gets his or her first bill. The regulations define “extraordinary” as:

• Reporting a patient’s delinquent debt to a credit bureau’

• Selling a patient’s debt to a third party;

• Placing a lien on a patient’s property;

• Foreclosing on a patient’s real property;

• Attaching or seizing an a patient’s bank account or any other personal property;

• Commencing a civil action against a patient;

• Causing a patient’s arrest;

• Causing a patient’s to be subject to a writ of body attachment; and,

• Garnishing a patient’s wages.

Not-for-profit hospitals can still engage a third-party to collect a patient debt.

We have all seen this coming for some time.   We will offer more on this as it develops.

Marcadis Singer, PA

Florida Collection Attorney

5104 South Westshore Blvd.

Tampa, Florida 33611

info @ marcadislaw.com

(888) 547-1881

(813) 288-1881

New Clients 

Ext. 247 Gil Singer

Ext. 240 Ralph Marcadis

Existing Client Client Liaison

Ext. 242

To Pay a Claim

Ext.  245