The Best Time To Outsource Your Bank Debt Collection

Choosing the method of recovering delinquent debt is a difficult task, especially when it comes to bank debt collection. Debtors have a number of ways to avoid this pursuit. On the other hand, if bank debt collection is outsourced at the right time, all participants can benefit from the recovery results.

February through April every year is full of happy consumers with spending power due to the frequency of tax returns. A large percentage of consumers receive a tax refund every year, and most will not pay check cashing fees just to hold onto the green. Rather, the vast majority will deposit their return in their checking accounts.

This leads to immediate collection of overdraft fees and overdrawn checking accounts for banks. At the same time, these are by far not the only delinquent accounts owned by banks.

Keep in mind that many consumers with bad debt have felt harassed by collection calls for a great deal of time, and the refund check affords them the opportunity to get some of the collection agencies off their backs.

Many people intend to use tax refunds to pay off outstanding bills anyway, which leads to eagerness to end bank debt collection attempts. The fastest way for a bank to profit from this desire to rectify accounts is to sell their delinquent debt portfolios to collection agencies.

Why do banks profit more during this time? Because the debt collection firms have a higher recovery rate during tax season, they have a higher profit margin. When these agencies recover bank debt collection accounts, they are paying only a fraction of the amount of debt actually owed. In times when the agencies stand to make more from their recovery efforts, the amount they are willing to pay for the delinquent debt is higher. This means that the banks are able to recover more cents on the dollar for any delinquent debt sold during this time, giving them more investment capital for other internal profit pursuits.

Consumers, too, benefit from this because they can often settle for lower payment amounts with the available cash. For example, if a debt collection agency is requesting a payment of $500 while the consumer has $450 in cash immediately available to be directly drafted from their bank account, it is likely to be accepted as payment in full.

Bank debt collection results are achieved by working smart rather than hard. Selling delinquent debt during the early months of the year for outsourced recovery aids in all parties profiting from the venture.

Also, discover additional essential information and resources about collection agencies options and business debt collection solutions.