Collection Terms and Conditions

*We often have clients ask us what they should include in their Terms and Conditions to protect them from a collection standpoint.

Always make sure that you have language in your contract that ensures the delinquent client pay all legal and/or collection fees if not paid within terms.  Is this foolproof?  Not always.  You may get a judge that decides to rule against it, even though it is in the signed contract.  Sometimes the judge will allow interest and court costs, but not attorney fees.  It may vary by courts, but it’s usually the judge’s prerogative to include costs.

One thing for sure, however, is that you will not get paid for any additional costs in court if it is not included in the signed contract.  Never.  Sometimes you’ll get interest, but never legal fees and often not other costs.

*We also have clients who claim they have a signed contract that includes costs, and expect the collection agency to collect these costs without suit.

The collection agency will always attempt to collect as much as possible.  This includes all interest and collection costs, as the agency earns more in fees the more it collects.  The rate is based on anything collected.  However, it is rare to get a delinquent debtor to pay anything additional without suit.  In most cases, it is best to just get the principal amount in the door, then sue for costs of collection only if it is cost effective.  In most cases, the “bird in the hand” approach is best.

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Contact Information

Baltimore Credit &
Collection Services, Inc.
6400 Baltimore National Pike, #469
Baltimore, MD 21228-3915
Phone: 410-549-6444
Fax: 410-549-3366