When you go to a New Jersey collection attorney for help with collecting debt that is owed to you, your attorney will explain how collections efforts will differ depending on whether the debt was incurred by a consumer or by a business. Debt collection laws are in place to protect both creditors and debtors, and different ones apply to consumer and commercial debt.
Commercial Debt Collections
Collecting business-to-business debts is not as highly regulated as collections of consumer debts. Commercial debt collections happen when one business seeks to recover a debt owed to it by another business. Businesses are deemed able to understand what their rights are and to perform their financial duties and responsibilities. Because of the lesser amount of control, different tactics can be used to handle each commercial collection case. With commercial debt collections, it is important to get the help of a New Jersey collection attorney. Since this type of collections requires skilled negotiation and a special set of skills, an attorney may be better equipped to collect these debts in a manner that still maintains their client’s business relationship with the owing business. If you are owed a mixture of commercial and consumer debts, you may want to get help from an attorney who has experience with both.
Consumer Debt Collections
With consumer debt collections, you will be trying to collect debt owed to your business by a consumer. As consumers are not presumed to be as savvy as are businesses concerning their rights, how consumer collections are handled is tightly regulated by the law. In New Jersey, state laws govern how debts may be collected. Third-party debt collectors are not required to be licensed in the state, but they must post a bond and register as debt collectors. Federally, the Fair Debt Collections Practices Act, or FDCPA, controls the actions that may be taken when attempting to collect a consumer debt. The act outlines actions that are considered to be abusive types of collections attempts and provides ways for consumers to seek penalties against businesses and collectors who violate the FDCPA’s provisions. The act is codified into the federal law and is frequently amended and updated. Having a collections attorney to help you may thus help to ensure that the collections measures you take will be within the law so you do not incur penalties for acts deemed abusive or deceptive. It can be difficult for you to try to collect on a consumer debt on your own, and getting help makes sense.
What Are the Pros and Cons of Commercial and Consumer Debt Collection?
Both commercial and consumer debt collection have pros and cons associated with them. With consumer debt collection, the difficulties posed by tightly controlling laws may make it hard for you to try to collect on your own. When you are trying to collect a commercial debt owed by another business to yours, you will need to be able to walk a tight line in order to secure payment without damaging your business relationship. In either situation, having the help of a collections lawyer may make the difference in whether you are able to recover the money you are owed. Whether the debt is a commercial or consumer one, debt collection can be complex.
Contact a New Jersey Collection Attorney
To speak with a New Jersey collection attorney at Snellings Law LLC, call (973) 265-6100.