Collection & Credit Insights
March 2003
Volume 11.3
Download as PDF - Front - Back
Debt in America
The Average Debtor:
The average American household (with at least one credit card) carried a total balance of $8,367 in 2001, up from $8,123 in 2000. (Source: Credit Web).
Bank credit card loans in the U.S. totaled $607.7 billion in 2001, up 6.9 percent from 2000's figure of $568.4 billion. (Source: Credit Web).
Nellie Mae reports that the percentage of students with credit cards rose from 67 percent in 1998 to 78% in 2000. Average student credit card debt also rose from $1,879 to $2,748.
The Magnitude of Consumer's Debt:
By the end of February 2002, outstanding consumer credit totaled $1.67 trillion (Source: Federal Reserve Board).
According to the Federal Reserve Board, families dedicated 7.93 percent of income to consumer credit and loans and 6.37 percent to mortgages.
In 2001, 63 percent of workers felt confident that they will have enough money to live comfortably in retirement, compared with 72 percent in 2000 (Source: American Savings Education Council Retirement Confidence Survey).
More than 6,500 collection agencies and 1,600 credit reporting agencies service an estimated $135 billion in delinquent consumer debt placed for collection in 2000. This is nearly double the $73 billion placed for collection in 1990 (Source: The Kaulkin Report, August 2001).
Bankruptcy:
Myth: Collectors force people into bankruptcy.
Fact: In reality, it would not make sense for a collector to encourage a consumer to file for bankruptcy. When people file for bankruptcy, their financial obligations to their creditors are usually wiped clean-and the credit grantor and collector receive very little. Collectors understand that people in financial trouble often need guidance in settling their accounts without expensive litigation, and often need the flexibility of alternative payment arrangements to work out their financial trouble. A collector's business is to collect, but in practice, collecting often includes counseling.
Role of Professional Third Party Debt Collectors:
The debt collection market generates approximately $13 billion in revenues for United States companies (Source: The Kaulkin Report, August 2001).
Recent estimates by the Bureau of Labor Statistics show employment in the collection industry is expected to increase by 35 percent or more by 2008
(Source: Bureau of Labor Statistics, 2000-2001 Occupational Outlook Handbook).
Article source:
ACA Web site
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(734) 665-6173
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Upcoming Events
MDA
May 14-17, 2003
Towing Rodeo
August 7-9, 2003
Welcome to Our New Clients
- Jerry's Towing & Recovery, Inc.
- Steve's Auto Parts
- Nelson's Towing
- Integrity Counseling
- Louis Tsui
- New Release Video
- Stoney Creek Equine
- Pioneer Transmission
- Mercy Amicare Home
- Healthcare at Home-Oak
- Adair & Shamley Tool Sales, Inc.
Let us bring you a little green this month!
Happy St. Patrick's Day!!
People don't care how much you know,
until they know how much you...
collect
TAX TIME!
It's that time of the year again, when the snow is blowing, people are bustling about, bells are ringing...sorry, that was last year. I meant the IRS is calling. Yes, it is tax time again.
As my grandpa used to say. "You only have to do two things in life: pay taxes and die." Well, he grew up in an era where everyone did pay their taxes, without all the loopholes, because it was the right thing to do for the country they loved - and they didn't have C-SPAN.
Now tax time means various things to various people. For some it is a dreaded time of year trying to find enough money to pay the toll. For others it is Christmas in April because they are getting a refund. These are the ones we are interested in - and you should be too!
Remember, with the new E-File, your debtors are getting their refunds earlier and earlier. Businesses have until January 31 to forward the necessary filing documents to individuals, but once that individual gets their forms it may be too late. They are running off to H&R Block or doing TurboTax to get that refund - and they can get it in days.
Why all the tax detail? Because this is the time you should be stepping up your collection activity. Not at year end because the books are closing - they are going to spend it on Christmas, not your bill.
Make those extra calls or create a special letter that advises debtors that they still have an outstanding bill with you. Appeal to their need to resolve their bill and then spend the extra money on themselves.
Remember, the squeaky wheel gets the grease - if you aren't calling, someone else is. Funny that the tax collector always gets her money!
Tina Walther
Client Sales Consultant
Quotations Board
Not everything that is faced can be changed, but nothing can be changed until it is faced.
- James Baldwin
We know what we are, but know not what we may be.
- William Shakespeare
Timely Returns
Ours is a reciprocal relationship indeed. There clearly exists a direct correlation between the timely recovery or return of your bad debts listed with our office and the timely responses you provide to our requests.
Requests like disputes that we forward to you must have your input and response within a limited time frame (interpreted as thirty days) for collection efforts to continue. Other requests such as our suit authorization forms need to be returned to our office, regardless or whether you wish us to pursue litigation or not. We rely heavily on your swift attention to such requests; they often mean the difference between collecting the bill or not.
So the next time you receive a request for response from us whether it be a dispute, request for additional information or suit authorization remember that your timely response has immediate impact on our ability (and in some cases right) to continue collection efforts. Please reply promptly so we may continue to work on recovery of your receivables.
Happy Spring!
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