Top 8 Causes of Debt in the USA

23 06 2011

People today are getting themselves into more and more debt.  This growing problem is especially bad in America.  Here are 8 top causes of debt.

  1. Spending money before you have it
    Credit cards make this very easy to do.  It can be tempting to buy something when you have a credit card which will allow you to buy something before you have the cash in hand.  The trick about credit cards is that every month you don’t pay off the bill in full; the money remaining accumulates interest.  Credit card charges rack up very quickly and before you know it, you owe your card company more money than you actually spent. Banks also raise interest rates as soon as a payment is late making it even harder to pay off the debt.
  2. Little or no savings
    One of the easiest ways to avoid going into debt is to have savings.  Life always has unexpected costs that will throw you into debt if you are not prepared for them.  Sometimes there are unexpected costs that are pressing and cannot be postponed like a pipe breaks in your home flooding all the floors, or your car dies and you need to buy a new one.  These are not things that can wait, so saving for a rainy day is important. 10 % of your paycheck should be put aside for unexpected events.
  3. Divorce
    With more than 50% of Americans being divorced, this is an important thing to consider.  Divorces are not really something you can plan for financially.  Its just one of those unexpected costs that happens in life.
  4. Medical Expenses
    Even with health insurance, medical bills can still pile up.  Most doctors and hospitals accept credit cards as a form of payment.  This is because the professionals want their payment at the time of service to ensure they receive it.  This unfortunately is one of the things that add to credit card debt.
  5. Gambling
    The thought that you can go into a building with little money and walk away with tons is intoxicating to some.  People these days love to gamble, whether it is because of the thrill or because they are just desperate for money.  The reality of it is most people end up leaving with negative money.  Gambling addictions are by far some of the worst, especially when it comes to staying out of debt.
  6. Poor Money Communication
    It is crucial to communicate about spending and saving with your spouse and/or children.  If one of you is someone who spends lots of money it is important to know this and anticipate a larger bill at the end of the month.  When dealing with shared accounts this is one of the most important things to do. Consider setting aside time to discuss financial philosophies and priorities before it becomes a problem!
  7. Poor Money Management
    Basic things like balancing a check book and keeping track of your spending are very important to get in the habit of doing.  These little tricks will help you realize where most of your money is going and allow you to cut back on unnecessary spending. If you pay everything online then visit your online accounts once a month to keep yourself informed about your accounts.
  8.  Reduced Income
    The current state of our economy has been the cause of   people losing   jobs or possibly experiencing pay cuts.  If this happens it is important to cut back on spending, unless you have a reserve of cash to subsidize yourself. If you are receiving less money you need to spend less money. 
Advertisements




New Years Resolution for 2011: Five Ways to improve you collections from 2010 to 2011

14 12 2010
  1. Develop an approval process to reduce the number of problem accounts. Only extend credit to those who pass your approval process. This may include getting a background and asset check before accepting them as your customer. Once you accept a customer, you may want to consider the following:
  • Possibly getting a credit card to secure payments.  Next to cash payments, this is an effective way to ensure the customer is committed to paying you.
  • Consider setting in a Progress Payment Plan for work in progress or Contract Sales.  For example, 15% at placement of order, 40% after 60 days, etc. to lighten the tightness of cash flow and lower the payment for the customer.
  • Set a credit limit for every customer.
  1. Get Deposits. In Large orders, produce to orders, and custom orders, getting a non-refundable deposit of 10-50% of the final price ensures the customers commitment to pay.
  2. Do not wait too long before you attempt to collect. The grace period past the due date should only be about 2 business days.  After that is it time to contact your customer to let them know that you are on top of things.  The longer you wait the less chance you have of collecting. Be friendly with the first reminder.  If your customer still does not pay after you continually contact them, consider hiring a debt collection agency, and FAST!
  3. Document any contact you have with your customers.  Always start a conversation with the terms of the original agreement to let your customer know that you are going to be on top of the issue until the bill is paid.
  4. Be fair and firm.  Creating templates of scripts of what you will say is a great way to be sure that you stay calm and friendly when trying to get your customer to pay.




International Debt Collection

19 11 2010

With the growth of a global economy, more and more companies are able to advertise and sell their products and services in other countries as well as their own.  Global economies also lead to the expansion of debt collections into foreign countries. When doing business in a different country, you need experience and knowledge of the countries government and laws, trade restrictions and requirements, and the differing currencies and credit reporting criteria.

Debt Collection Agencies collecting from or for companies outside the United States need to consider a few factors:

1. Language – Working with people from different countries often presents a language barrier.  It is important to have a translator for communication.

2. Time Zones – Working across time zones presents communication challenges and time constraints regarding when you can talk with someone in the opposite time zone.

3. Foreign Partner Relationships – Gaining the cooperation and a positive attitude while working with a foreign country will build a quality relationship between the client, collection agency, and debtor.

4. Laws – It is important for a debt collection agency to understand their country’s laws and the other country’s laws and policies regarding credit, collection, and the court systems.

At Butler Robbins & White Global Revenue Recovery, we are able to collect foreign debt with our unique research.  We may be able to transfer a judgment to a foreign country. We are sensitive to the different cultures we work with and offer an extended arm, so companies are able to interconnect with the United States.

Let us help you! Email us today at RKluge@brwcollect.com