Reporting To Credit Bureaus: Just One Of The Many Benefits Of Using A Collections Firm

Community Associations such as Condos and Homeowner Associations often have good reason to report non-paying members to the credit reporting agencies. The only problem is that don’t have the ability to do so, and usually it is not a function of their community association attorney who has taken on the collection of this particular debt. Therefore, one of the most important and potent tools that exist for the purpose of effective collections is not being used. So what can a community association do to get credit collection services delivered to them and have delinquencies reported to credit bureaus?

Well, the first thing they need to do is engage a specialist in collections and remove their collections from a solution that is not geared up to do collections, namely community association attorneys. Yes, attorneys are necessary to files liens and foreclose said liens but collection activity such as outbound calls, sending FDCPA notices, and credit bureau reporting are not usually in province of community association lawyers. Would you let your family physician take out your gall bladder? I don’t think so, and that is why a community association board of directors needs to engage a collection firm to do this heavy lifting and specialized service.

Hire a collections company. Using a credit agency allows you to focus on running your association rather than chasing down bad debts. Debt collection is also not typically within the scope of services most community association management firms offer. A collections company is familiar with debt collection laws and the most effective way to get a debtor to pay. We are dealing with many laws and regulations that include the FDCPA, TCPA, FCRA and non-compliance is serious business. Also, collection companies will carry the insurance required for violation of these laws.

Another advantage is collection agencies are already members of the credit bureaus reporting service and can easily report bad debts.

Boards of Directors of community associations need to rethink their strategy about sending collections to their community association attorneys. Talk to a specialist and understand that most collection firms that service the community association industry are merit based so that if they don’t collect their fees the association and the good paying owners are not stuck with that cost as well.

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