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DaycareMomma 07:25 PM 07-01-2012
Are there any certain collection agencies that you recommend to collect a payment debt?

Any advice for sending an account to collections?
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EntropyControlSpecialist 07:30 PM 07-01-2012
I'm in the same situation. I'll be watching this thread!
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Michael 07:52 PM 07-01-2012
Don't know if there is any information in these earlier threads: https://www.daycare.com/forum/tags.p...lection+agency
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Meeko 07:30 AM 07-02-2012
I use Advanced Credit Management right here in Orem, Utah, although they help people nationwide.

http://www.advancedcreditmanagement.mobi/

Doesn't cost me one single dime. At least it didn't the last time I used them which was a few years ago. I am going to assume they still offer that service, but feel free to call them! The people in their office are very friendly and accommodating.

I turn over the paperwork/amounts etc to them. It is then out of my hands. By law, the parents cannot pay me. If I accept payment from the parent, I am then liable to pay the collection company their 40% too. So I wash my hands of it and refuse to even talk to the offending parents.

They immediately add 40% to the amount owed by the parent and go after them. They continue to add their attorney fees/court costs etc to the bill as they go. When the parent coughs up, I get what is owed to me and they also have to pay an extra 40% to the collection firm. If a judgement is made in court and the parent has to pay a monthly amount until paid off, I get 60% of the payment and ACM get 40% until I have been paid in full.

I love this way because once I turn over an account, it's out of my hands. No dealing with difficult parents, no time off to go to court etc. The collections company go after the parent aggressively...no backbone needed by me!!! I just sit back and get paid.

I have it in my contract that I use this firm, that it doesn't cost me one red cent, and that they add 40% to the bill if I turn it over to them. I have it written that it is too late to make payment to me once I have turned over an account. This is usually enough to make parents pay up. They don't want to end up owing even more AND have a ding on their credit for having been turned over to a collections agency.

I would not like the confrontation of small claims court (been there/done that when selling a car to a neighbor. We won, but it was a nasty experience) and I don't want to have to close my day care down for the day to go to court either.

Happy to let someone else do the chasing and "messy" part!
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DaycareMomma 07:47 AM 07-02-2012
Thanks Meeko for the information. My only question, is in my contract I don't have anything about what steps I'd take if non payment happened. So could I still use a company like that that will add 40% to their bill? Or do they have to be previously made aware of it?
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Kiki 07:54 AM 07-02-2012
Originally Posted by DaycareMomma:
Thanks Meeko for the information. My only question, is in my contract I don't have anything about what steps I'd take if non payment happened. So could I still use a company like that that will add 40% to their bill? Or do they have to be previously made aware of it?
Do you have anything at all? Even just a generic 'All accounts 30 days or more past due will be turned over to collections.'? If so, I'm fairly certain you'd still be able to use this company, all collection agencies tack on a fee to the amount they are collecting, that's how they make money.
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DaycareMomma 09:05 AM 07-02-2012
Regretfully I don't have anything in my contract concerning late payments and collection agencies. This is all it says regarding late payments:

"I am to be paid at the end of every week. If not paid by closing on the last day of care for the week, a late fee of $20.00 will be added on. If not paid by the next working day morning, a $5.00/day charge will be added on and I will not watch your child until you have paid me."
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EntropyControlSpecialist 09:23 AM 07-02-2012
Originally Posted by DaycareMomma:
Regretfully I don't have anything in my contract concerning late payments and collection agencies. This is all it says regarding late payments:

"I am to be paid at the end of every week. If not paid by closing on the last day of care for the week, a late fee of $20.00 will be added on. If not paid by the next working day morning, a $5.00/day charge will be added on and I will not watch your child until you have paid me."
I'm also in a somewhat similar position. I do not have anything in my handbook detailing what happens to unpaid accounts. I am adding it today.

I don't see why we couldn't send a certified letter detailing what is owed, when it is due, and what will happen if they fail to pay (it gets turned over to a collections agency)? We would know they received it, because they would have to sign for it.
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DaycareMomma 09:28 AM 07-02-2012
Thats actually just what I did, here is my exact letter to them:

As of today's date (June 26th, 2012) you owe me, ******* *****, $800.00.This amount is for the timeframes of May 14th, 2012 to May 31st, 2012 for care given to your children ***** and *****. This amount is past due and as a result you will incur an automatic fee of $20.00 for nonpayment along with $5.00 per day until your account is paid in full.

I am willing to waive the late fees if payment is received by June 29th, 2012 by 5:30 PM.

If you fail to pay by June 29th, 2012 at 5:30 PM I will send your account to a collection agency to recover the proper fee’s due to me. In addition, if not paid by above said date, you will be responsible for all late fees’ which will equal $165 as of June 29th, 2012 at 5:30 PM. You will also be responsible for any fee’s I incur while attempting to collect your debt owed to me.

Enclosed you will find the signature page of my contract showing that you signed it and agreed to all my terms and policies.

Thank you for your prompt attention to this matter.
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missjenny 10:26 AM 07-02-2012
Originally Posted by Kiki:
Do you have anything at all? Even just a generic 'All accounts 30 days or more past due will be turned over to collections.'? If so, I'm fairly certain you'd still be able to use this company, all collection agencies tack on a fee to the amount they are collecting, that's how they make money.



I will add something like this to mine.
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Blackcat31 01:06 PM 07-02-2012
Why send the bill to collection? Why not just take them to small claims court?

I included in my contract that I would hire a substitute if I had to go court to pursue money owed and the family would be required to pay for the cost of the substitute.

My contract says:

In the event that any payment is not made; parents will be responsible for the following fees: ANY and ALL costs associated with the non-payment, including but not limited to, accumulated late fees, return check fees ($30.00), insufficient funds fees, collection fees, court costs, and substitute fees. Collection of any payments not made will begin 10 calendar days after the original due date.
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DaycareMomma 01:29 PM 07-02-2012
The reason I'm looking at collections over small claims court is I feel that it will hurt them more. They have made it well known that they are trying to do everything possible to clean up their credit to buy a house and by sending to collections, it will go on their credit report and be very hard to get any loans with it on there without taking care of it.
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MyAngels 01:42 PM 07-02-2012
I know in my state it's very difficult to collect attorneys fees, court costs or collection fees on a contract if you don't specifically spell it out in the contract - i.e., "If any fees are unpaid at the termination of this contract you will be responsible for those fees, plus the costs of collection, including, but not limited to, attorneys fees, court costs and collection agency fees."

I'm sure each state is different, but it couldn't hurt to check with an attorney to be sure you're covered in the event of a default.
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Country Kids 01:42 PM 07-02-2012
I think even if you take them to small claims court it will show up on their credit report. It would come under a garnishment I believe.

Going to court though takes alot of time. I tried small claims once and it was a pain because I only received a little bit of my money because my time or something ran out for it. I was put on a list of receivers that she owed money from. Well I started to receive money but they needed me to reapply or something and I just didn't have the time to do all that so I just lost out.

If I have to do it ever again I might just go through a credit agency.
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DaycareMomma 01:47 PM 07-02-2012
I'm new to all of this so we'll see what happens. I figure, even if they don't pay but its on their credit report and it isn't really that small of an amount either, its $980 they owe me as of today, to see that as a loan officer, you'd think it would turn them off that they cannot even pay the person that cares for their children.
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Truly Scrumptious 01:47 PM 07-02-2012
You can check with Tom Copeland, he's a lawyer and writes books for Red Leaf Press. If you call Red Leaf Press and ask for him, you can talk with him personally. If he's not in, leave a message and he will call you back. He's very nice and very helpful. He can answer any legal questions you have in regards to day care.
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EntropyControlSpecialist 03:30 PM 07-02-2012
The hassle involved in small claims court seems far more time consuming than sending their account to collections.
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Meeko 08:48 PM 07-02-2012
Originally Posted by EntropyControlSpe******t:
The hassle involved in small claims court seems far more time consuming than sending their account to collections.
Collections takes a few minutes...literally. Hand over the info and then go home and wait for your money! No stress of court, no days off, no prep work, no statements to the judge......I let them do all that and make the parent pay for it!
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DaycareMomma 06:28 AM 07-03-2012
Well, I will be calling the collection agency above today. The parents had said they'd pay me $300 yesterday once the dad cashed his check, well I saw money, but only 1/3rd of that... I only got $100. So once all my kids get here today, I'm going to be calling them.

Meeko, what information should I have handy?
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Meeko 07:00 AM 07-03-2012
Originally Posted by DaycareMomma:
Well, I will be calling the collection agency above today. The parents had said they'd pay me $300 yesterday once the dad cashed his check, well I saw money, but only 1/3rd of that... I only got $100. So once all my kids get here today, I'm going to be calling them.

Meeko, what information should I have handy?
I gave them a copy of the contract, so they can see the parent is in breach of contract. And a summary of the dollar amount (fees, late fees etc) I am going after. I filled out some of their paperwork too...basically saying I understood that they were now in charge of the account/their terms etc.

I first sent registered mail to the parents demanding pay by a certain date or the account would go to collections (I allow 30 days) I let them know that $10 per day is added in late fees until 30 days and then it goes to collections.

It's been a few years since I needed them, so call them and ask what you need to send them. The office staff are very helpful.

Main thing to remember is once collections have the account...the parents cannot pay you. It's too late for them to panic and apologize and try to pay. If they contact you, you have to tell them to deal with the collections company only. I actually have this in my contract, so they know upfront that I mean business and they need to pay when it's due.
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DaycareMomma 07:15 AM 07-03-2012
Thanks! I will be calling soon. I'm a bit nervous, as I've never had to do this before, but it needs to be done. I sent them a certified letter last week stating if it wasn't paid by the 29th I'd send it to collections.
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EntropyControlSpecialist 10:14 AM 07-03-2012
So, if we have nothing about a collections agency in our Parent Handbook are we allowed to send their account to collections?

I have added it in and re-uploaded my Parent Handbook to my website.
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Truly Scrumptious 10:29 AM 07-03-2012
You should have a contract seperate from your policies.
The contract deals with time and money only and your policy or parent handbook deals with everything else.
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DaycareMomma 11:12 AM 07-03-2012
Can someone send me a sample copy of their contract and their policy or parent handbook. Right now, mine are both together and I'd like to seperate them all the while putting in a few new additions about collection agencies.

Please email to acebydanelle@hotmail.com
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Kiki 12:36 PM 07-03-2012
Originally Posted by EntropyControlSpe******t:
So, if we have nothing about a collections agency in our Parent Handbook are we allowed to send their account to collections?

I have added it in and re-uploaded my Parent Handbook to my website.
IIRC you can send them to collections regardless of having a clause in there. As long as they signed saying they owe you x on x day, you can send them to collections.
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EntropyControlSpecialist 04:47 PM 07-03-2012
Originally Posted by Truly Scrumptious:
You should have a contract seperate from your policies.
The contract deals with time and money only and your policy or parent handbook deals with everything else.
My Parent Handbook details everything, including money related things.
My contract is a straightforward, to the point agreement form (provided by the state) that details who they are enrolling, what meals are included, what the hours of the business are, what days and times they will be attending, whether they will pay bi-weekly or monthly, how much is to be paid for each payment, and what is charged as a late fee.
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EntropyControlSpecialist 04:48 PM 07-03-2012
Originally Posted by Kiki:
IIRC you can send them to collections regardless of having a clause in there. As long as they signed saying they owe you x on x day, you can send them to collections.
Thank you.
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DaycareMomma 07:38 AM 07-10-2012
Wish me luck, I'm making the call today. Well I already tried but forgot about the time difference! I still have to wait another hour before I can call them... I'm so nervous!
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DaycareMomma 09:43 AM 07-10-2012
I call them and unless you live in Utah or the debt is from Utah you cannot use their services. Additionally, if you do not have a clause in your contract stating you will send unpaid accounts to a collection agency, they take their 40% out of your money.
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MarinaVanessa 11:20 AM 07-10-2012
I suggest that for any new and current clients you start requiring that all payments be done before services are rendered. For example, this Friday my clients will pay me their weekly amount which will cover next week of child care. I require a two week's notice of termination in writing and I require a two week deposit equivalent to their weekly rate be paid before they start. This deposit is used to pay for their last 2 weeks of child care should they terminate. Their 1st week of daycare and their 2 week deposit is due BEFORE their first day of daycare.

You may want to think about doing this and then having a NO PAY, NO PLAY/STAY policy. If they don't pay, their child can't come to daycare until they pay it and late fees.

Here's what I have in my policies that covers what I mentioned:

Originally Posted by :
Security Deposit

A security deposit is required for each child in the amount of two full weeks of care. The deposit will serve as payment for a child’s final two weeks of care, provided that appropriate notice is given in writing. If proper notice of termination is not given then the deposit will be forfeited and payment for the final two-weeks of care will still be owed.
Originally Posted by :
Tuition

All full and part-time tuition payments are to be made in advance of care and are to be made payable on Fridays no later than 6:00 p.m. to cover the following week of child care. If a child is not present on this day tuition is still due.
Originally Posted by :
Late Payments

There is a late payment fee of $5.00 per day for full and part-time clients if tuition is not paid by Friday at 6:00 p.m. Child care services will not be rendered unless all balances are paid.
Originally Posted by :
Unpaid Tuition & Fee’s

If a period of one week (seven days including weekends) passes and payment
still has not been received, the contract may be terminated and the position filled.

The client will be responsible for any payments owed up to this point, any late
fees that accrue and also for the time of the child’s required two week notice even if the child has not been present in the daycare. The client will also forfeit the security deposit.

Attempts to collect monies owed, if not successfully collected, will be sent to court and reported to collections should it be necessary. The client will also be responsible for any fees and costs incurred during this process including, but not limited to, court, attorney and collection agency fees.

The client’s account will also be reported to ProviderWatch, a national child care credit reporting agency catered for child care providers to run checks on clients. Many child care providers use ProviderWatch to screen potential clients for past due accounts or to check if they have trouble paying their
childcare obligations.

ProviderWatch.com 866-267-3691.

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Tags:2012, collection agency, collections, past due letter, small claims
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