Making collections in house can be time consuming and in many cases not effective. Sending additional invoices to AR accounts that are more than 60 days old is frequently a waste of time. Calling businesses and individuals directly can be effective if you have an effective collection script to follow during the contact. Many small business owners are uncomfortable in making collection phone calls. In general do it yourself collections are not all that successful.

Sending a pre collection notice to a past due account can be effective if done correctly. A business that sends a collection warning under the business letter head is in general not as effective as using a collection agency mailing. However using your business letterhead and stating that the AR debt is going to be turned over to collection agency xyz is one of the more effective debt collection techniques. Using a well known collection agency with name recognition will add leverage to your collection effort.

If these debt collection techniques are not effective then you will have to consider using a collection agency. Regular collection agency fees can be expensive and frequently require large upfront fees prior to beginning any collection efforts. In addition all collection payments are sent to the collection agency. Frequently the collection costs will mean that a business may only recover 20 percent of the AR debt.

Online debt collection agencies may be one of the better debt collection techniques available today. If Your business is a business to business (B2B) then online collections can be very effective in making collections on AR that are less than 90 days old. These agencies are relatively inexpensive to use and give the business owner more control over the collection efforts. Frequently you can make application for assistance on line. Once accepted all you need to do is upload your delinquent AR information to the collection agency data base. Fees are based on each contact that is made.

A collection letter in many cases costs less than $8.00 per mailing. Getting a collection letter from an online collection agency will in most case result in a payment. All payments are made directly to the business. Once a payment is made then the business owner removes the AR debt file from the collection agencies data base.

Additional debt collection techniques that can be employed include selling your past due AR debt to a collection agency. Depending on the age, amount and type of AR debt you may be able to recover as much as 50 percent of the AR debt. It pays to contact several collection agencies to find the best deal. You can also consider writing off old AR debt and use it as a tax break. You will have to contact your CPA to find what types of debt can be written off prior to considering using this method.

These debt collection techniques are available to just about every type of business. Unfortunately every business will have past due account receivable debt that cannot be collected no matter what method you use. Bankruptcy, recession and changing economics are just some of the reasons. Each business will have to make a decision as to what types of debt collection techniques to employ. Good techniques will help to ensure that your business is successful.

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Some homeowners that are struggling with their mortgage payments or facing foreclosure may choose to hire a real estate attorney or search loan modification companies rather than going it alone due to the fact an attorney may drive a more positive result, or other avenues have failed. Navigating through the mortgage lender's loss mitigation department can be difficult at times, similar to the stories told of the Bermuda Triangle. I mean things just disappear! Keeping in mind the lender or loan servicing company is just trying to collect a debt and make a loan perform for the investor.

Debt collections is different than loan modifications being that people have been collecting debt for over a couple hundred years and doing loan mods for 6 months . I have heard horror stories from clients just trying to get through to loss mitigation departments by phone or worse yet once contact is made; lost faxes, poor results, declines, unaffordable forbearance agreements, or going into foreclosure.

Remember...the lender is mainly trying to collect delinquent payments, not give you 2.50% fixed for 5 years on a 5.00% 30 year fixed and knock $100,000 of your principal loan balance. Yes, these things may be possible. They are done on a case by case basis and must be properly negotiated to get the most favorable short and long term results. Hiring a qualified attorney is usually going to get better results.

Be very careful when doing a loan modification!

In many cases we have seen clients hurt themselves by telling or showing the lender certain things they should not. You must understand, the personnel in the loss mitigation dept. are highly trained at negotiating and collecting past due mortgage payments. This is why the lender will normally not consider a modification unless you are 3 or more payments behind.

This is why the lender wants to see you have some money available to send them immediately and they will consider a modification after 3 months of higher payments made on time. Unfortunately, most of the time we see clients have defaulted again thus causing more fees and possibly back in the foreclosure process.

A loan modification is a long term solution, modified forbearance agreements are designed by the lenders to just get paid. Of coarse they will negotiate with you to get caught up, requiring a portion of the arrearages to be paid up front to reinstate the loan or to stop foreclosure.

Be Very careful doing a loan modification with a Loan Modification Company!

There are several loan modification companies/loss mitigation companies advertising success rates, money back guarantees, large principal reductions, 4.50% 30 year fixed rates and I can go on and on and on. A company in Los Angeles boasts a "Home Equity Leveling program where you pay them $1500 up front for processing then 1% of the loan amount when they get you a huge principal reduction, with NO CREDENTIALS. Please!

The worse I have heard was a company that tells you they freeze your payments for 5 months and you make reduced monthly payments to them while they negotiate with your lender. I mean, this so called attorney backed loan modification company is getting home owners to pay the ridicules monthly fees and getting no results. Let's put it like this, just check with the Attorney Generals Office as there has already been cases filed against stop foreclosure and loan modification companies.

I am not saying that everyone's dishonest or will stop at nothing to get a sale; I am just saying that few are operating legally or know what they're doing. Make sure to do your research, ask questions, and ask to speak with the attorney or better yet what his name is.

It's unfortunate that most home owners are stuck in this spot in the first place that they would be taken again. Several loan modification companies boast the fact that an Attorney handles the negotiation or they are "Attorney backed" "Attorney Assisted". "Attorney Based" or "Our In House Attorneys". The sales people have titles like "Loan Modification Specialist",Loan Modification Expert" or "Stop Foreclosure Consultant" I find this quite amusing.

Now, I may be partial because I am an attorney and my law firm hires only experienced attorneys, paralegals and bank negotiators to handle client's files. But the truth is, my staff is compassionate and knows what they're doing. They know what a loan modification looks like and how to negotiate with the lender. Better yet, you are working with a law office.

What's a real loan modification look like?

It should look like a 30 year fixed rate between 5.00% and 6.00% allowing a borrower the long term ability to pay. If that is not affordable to the client there are other options depending on the investor, who is servicing the loan and the extenuating circumstances.

Modifying the terms of the existing mortgage may also include a discounted rate fixed for a period of 3 to 5 years then gradually increase to a fair market fixed rate up to 40 years.

A lender may also opt to reduce the principal balance or forgive part or all of a 2nd mortgage if presented with a valid case. Basically, a real loan modification will look like a reasonable long term solution for both parties, creating a "win-win" solution with a make sense approach.

In certain instances lenders have lowered the interest rate as low as 2.50% due to extreme hardships and the borrowers desire to keep their home.

IMPORTANT NOTICE:Loan Modification Program for Distressed Indymac Federal Mortgage Loans

Where should borrowers interested in the program call to apply?

Borrowers who are delinquent or who are experiencing financial hardship and are falling behind on their IndyMac Federal mortgage should call 1-800-781-7399 to speak with an IndyMac Federal customer service representative or visit the FDIC website.

It can also be done personally without involving a company in loan modification but it involves some work to be done. It requires calling your mortgage company and requesting them for loan modification. This involves explaining the situation in which you are unable to owe the payment of interest rates which are increased. This is followed by an assessment regarding monthly income and expenditure. It should prove the situation in which it is highly difficult to face such huge interest rates. It is not necessary for you to explain that you are headed to foreclosure as they may not be much interested to hear that you may led to foreclosure. This may result in acceptance or rejection of loan modification. Loan modification when accepted it may prove to be effective for a considerable period of time. It may also result in making the loan interest rates fixed or making some modification in the type by which the loan may reach an affordable level. Inspection and review will be made to determine if loan modification cane be faced by the current economic situation of the person applied for loan modification. If he proves to be unable to pay his arrear while he can face a loan modification then a loan modification approval will be made.

Such loan modification when done prove to be useful since it removes the stress of highly changing interest rates. It will change the existing mortgage and it will become a fresh start for the loan. There are times in which the request for loan modification may also be rejected. It is a must to maintain a record of such loan modification.

To process all of the applications resulting from these offers, the credit card industry makes extensive use of quantification, or credit scoring, to double check whether an applicant should be issued a credit card (or even become target for other kinds of credit). The industry turns to credit bureaus for the quantification part.

The credit bureaus credit scoring systems give creditors the capability to evaluate millions of applicants on a consistent and impartial basis. This has made the credit card one of the most highly efficient methods of obtaining, granting, and expending loans. The credit bureaus base their credit scoring systems on large samples of the population in order to make it statistically valid.

In the credit card industry, the credit scoring system generally involves a two-step process.

First, your credit card application itself is scored by the credit card company. For example, if you own your home you are likely to get more points than if you only rent one. If your application obtains a sufficient number of points, then the credit card company buys your credit report from the three major credit bureaus.

The three credit bureaus operating nationwide are Transunion, Experian, and Equifax. The issuers buy from all three credit bureaus because your Experian credit report will have different ratings from your Equifax credit report, and the credit score Transunion will also differ from the rest. The variation exists because each of these credit bureaus will have different sets of businesses and creditors that report to them. Thus, although the parameters that the credit bureaus track may be similar, the quantification or credit scoring results will differ.

The score on the credit report issued by each of the credit bureaus is central to the decision to issue a card.

As the vice president of a company that is in the business of designing scoring models for lenders once described it, an applicant may submit an application that's good as gold, but if the credit reports from the credit bureaus are lousy, the applicant will get turned down every time. In other words, it is the numbers on the ratings submitted by the credit bureaus, not the qualitative factors, which are ultimately decisive.

It may turn out, in the end, that the majority of applicants will get approved by one credit card firm or another. Because the profits from the credit card business are extraordinarily high, credit card firms can afford to have a small proportion of cardholders who are delinquent in paying their bills or even some of those who default on their debt. Nonetheless, it is in the interest of credit card companies to weed out those who will not be able to pay their accounts.

Scoring models of the credit bureaus will also vary from one locale to another, and these are regularly updated to reflect changing conditions. Despite great variation between the different credit bureaus' reports, the following items generally receive the most weight:

· Possession of a number of credit and charge cards (30 per cent or more of the points). You should realize that if you own too many cards, this may cost points, and that having no cards at all may be an even more serious liability. Having too many cards will increase the amount of credit that is available to you at any time, and it would be easy to run up your debt by charging more to the various credit cards. This is what causes concern with the lenders. On the other hand, the credit bureaus believe not having a credit card at all is definitely alarming: there must be something terribly wrong.

· Record of paying off accumulated charges (25 percent or more of the points). You are likely to lose more points if you are delinquent on any of your credit cards than if you are late on a payment to a department store. The observed credit behavior that is common among the credit bureaus' scoring models is that when people are having economic difficulties, they will try to stay current on their credit card payments but might let their department store bill slide. Thus, if you are delinquent on card bills, this is interpreted as an indication of serious financial difficulties. Delinquencies of 30 days might not cost you too many points, as allowance is given for late payments, but delinquencies of 60 days or more might well scuttle your chances of getting a new card.

· Suits, judgments, and bankruptcies involving the applicant. Bankruptcies are likely to be particularly damaging to your credit rating. Officers of credit bureaus explain that among lenders, they are not in any way forgiving about bankruptcy; the interpretation is that a bankrupt ripped off a creditor and got away with it legally.'

· Measures of stability. You will earn credit points for longer tenure on the job and in your place of residence. In the scoring models of credit bureaus, someone who has lived in the same place for three or more years might get twice as many points as someone who has recently moved.

· Income. It goes without saying that the higher your income, the greater the number of points you will earn from the credit bureaus on this parameter. It will certainly help if you have other income sources in addition to your job.

· Occupation and employer. If you belong to the highest-rated occupations, executives and professionals, you are likely to earn a large number of points from the credit bureaus. Similarly, being in the employ of a stable and profitable firm is likely to garner you many points, whereas employment in a firm on the edge of bankruptcy is likely to be very costly.

· Age. Generally, the older the applicant, the greater the number of points awarded by the credit bureaus. Those who have retired will probably earn fewer points on this aspect.

· Possession of savings and checking accounts. Checking accounts, because they tend to require more ability to manage finances, generally score twice as many points with the credit bureaus than savings accounts do.

· Homeownership (often 15 per cent of the total points). An applicant who owns a home is more stable than one who rents, has a sizable asset to protect, and is responsible for regular payments. This translates to higher points awarded by the credit bureaus.

The role of credit bureaus in making credit card approvals a speedy process cannot be overemphasized. Although you may think the system is arbitrary or impersonal, it does help make decision-making faster, more accurate, and more impartial than individuals. The credit bureaus thus take pains to ensure that their credit scoring models are properly designed to embody this impartiality and give equal credit opportunity - including those who may not garner enough points and become marginal cases in the overall credit scoring system.