Has Your Business Considered Probate Collections to Improve Your Bottom Line?

Has Your Business Considered Probate Collections to Improve Your Bottom Line? Does your business have delinquent accounts and you would like to improve your collections?

Are you a collections agency or law firm with debt portfolio looking to get a better return? If you answered "Yes" to either question, then read on... Probate- or Estate-Collections is one of the most effective ways to collect on delinquent accounts of deceased debtors. What is Probate- or Estate-Collections? When a consumer debtor dies, claims against the deceased debtor are mostly governed by the probate/estate laws. Probate courts with relevant jurisdiction (mostly based on deceased's last residence or location of primary assets) administer the estates. The laws are geared for expedient resolution of creditor claims and issues so that the estate can be administered efficiently. Probate collections will continue to play an increasingly important role in debt collections for two main reasons: Inverse Growth: Population over 65 years of age between now and 2035 will almost double while the percentage of population between the ages of 45 and 64 years will decrease. Increasing Debt: Continued increase in average revolving debt of seniors - 65 years or older. INVERSE GROWTH: Demographic changes impacting debt collections Currently, middle-aged population, between the ages of 40 and 59 years, holds the highest average debt in the US (Source: Experian Study). However, the middle-aged population is projected to shrink in size from 26% to 22% between 2010 and 2035. In the same period, the senior population, 65 years and older, is projected to almost double in size from about 40 million to over 77 million. By 2035, population older than 65 years is estimated to be 20% of the total US population (Source: National Census Bureau). INCREASING DEBT: Average debt held by seniors continues to increase People older than 65 years have continued to accumulate more and more revolving debt. Between 1992 and 2007, households with a family head older than 65 years tripled the median credit card debt owed (Source: Fast Facts, Employee Benefit Research Institute, Dec 02, 2009). In fact, according to the Demos survey conducted between April and August 2009 (as reported by USA Today, July 31 2009), credit card debt for Americans 65 and older is growing the quickest. Probate collections is very effective. But how do you go about it? Broadly speaking, there are 3 steps: Step 1: Identify deceased debtors in your debt portfolio (or delinquent accounts) Step 2: Locate the estate (including details such as when it was filed, which county/court, file or case number, etc.) if filed Step 3: File the relevant paperwork with the appropriate court in a timely manner Step 1: Identify deceased debtors in your debt portfolio There are several ways to figure out which of your debtors are deceased. If your portfolio is small (# of delinquent accounts), calling the last known contact number may get you to the deceased's family. For bigger portfolios, there are several online tools and skip-tracing companies that provide this service for a fee. Step 2: Locate the estate If your business has customers in just one or a few geographic areas, the task of locating the estate, if filed, is easy. Usually, you can go to the local County Court (or the Court that handles probate matters in your county/ jurisdiction) and look up Court Records to obtain the necessary information. If your business spans larger geographic area covering multiple counties and states, the task starts becoming confusing and complex. This is because, laws vary widely on how the information can be accessed. Some courts require you to be physically present at the court to search their records while others make all this information available online with easy search tools. It is very important to file your claims in a timely manner as the clock starts counting down, once an estate is filed in the name of the deceased debtor. Most courts have firm deadlines varying from a few months to a couple of years. If you have delinquent accounts that are more than a few, and across multiple counties/states, it is better to seek the experts. Tens of thousands of estates are filed every year. These estates are filed in over 3,200 probate courts all over the country. Each court has unique rules and methods for accessing estate filing data. Estates are sometimes filed at the place of death and sometimes where the assets are located. Some collections agencies and law firms who specialize in probate/estate collections perform both step 2 and step 3. Step 3: File the relevant paperwork with the appropriate court in a timely manner If you only have a few delinquent accounts of deceased debtors and know the estate information, you can file claims yourself using the guidelines outlined by the court. However, if you have more than a few accounts and the estates are filed in different courts, it is cost-effective to outsource this task to a probate law firm or a probate collections agency. Has Your Business Considered Probate Collections to Improve Your Bottom Line?