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That much is but the next apparentimplication – that theswe are boom times for the collections industry – misses the next turn of the Despite the best efforts of the debt a larger percentage of that bad debt will go “I wouldn’t say we’re countercyclical,” says Brian vice president of financial reportinv for the , a global firm providinhg a variety of outsourcing solutions, includingb debt collection. The compan y has a location in Albuquerqud and is one ofthe state’s most active collection “There are opportunities [in the currentr environment], but also challenges,” Callaha n said.
“We see a higher volume, but more difficulft collections. How that balances is the million-dollar question.” At the otherd company-size extreme, John Barlow owns and operates in which is facing the samemixed forecast. Barlow says therd is little change in three of the four categoriea of debtors he thechronic poor, who “never pay”; “thre credit criminals,” who never intended to pay; and what he jokinglgy calls “the stupid people,” those who have every abilityu and intention to pay, but don’tg manage their bills well enough to acknowledge a debt untill Barlow calls.
“The number of stupixd people doesn’t go up,” Barlow adds. The fourth which Barlow calls “the good Americans,” are the ones he’s increasinglh calling for thefirst time. They intendx to pay their debts and ofteh will agree topayment plans, though increasingly with tiny monthly Barlow says many of them are finding themselves at collection agents for psychologicakl reasons. “A lot of the people I talk to have jobs and were makinhg the same amount of moneyt five months ago theyare now. Therre may be no danger of pink slips, but they’res still scared,” he says. “It used to be I was competing forbeer money, then for casinl money.
But now I’m competing with fear.” Barlowq said the national recovery rate is now around 14 but as theeconomy slows, it will likely dip, taking away some of the advantagews of higher volume. If the econom turns bad enough that personal bankruptciedsspike again, collection agents will suffer, as bankruptcy freezes collection efforts. In response, the industry is busilyy passing around tips on how to deal with all thenew “good American” debtors. “You have to work smarter and do more stratificatio into abilityto pay,” Callahan “More people are doingv payment plans.
” Barlow says the impacf of his increased business on referrals to attorneysd is likely to be limited at first, because with both the collectionh agent and the attorney workinhg on contingency, there’s not enougnh meat on the bone of a small debt to make it wortbh the trouble. “Everybody’s threshold of who to sue says Barlow, who never tries to prosecute a debt of lessthan “The most [an attorney] can get [in a $1,000 is $250 – we’rse asking them to work four hours to get $250, when they normallty charge $200 an hour.
” And nobody makezs any money if it turns out there is no moneh to recover — Barlow has to use his own judgmentt on that before turning to an attorney. “I’k right about 50 percent of the he says. In addition to the law, debt collectorsx have one other advantagde ontheir side: the seven years a debt stays on a credit Barlow hopes to polish up some old debts historically harder to recover when the recession lifts and ability to pay “I’ll build an inventory quickly over the next two he says. “The recovery rate is so I may not get back to the recovery rate that I woulcd have had innormal times, but hopefully I’l l get close.
” Professional Collection Service Inc. John Barlow, owner 5555 Montgomeru Blvd. NE, Albuquerque, NM 87109 NCO Financial Systemds Inc. 2340 Menaul Blvd. NE #100, NM 87107 Web:
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