Debt Collection Myths – Fact or Fiction

Debt Collection Myths

“It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

Have you fallen for debt collection myths that could be costing your business money?

Take this quick quiz and find out how much you really know about debt collection best practices. We’ll separate fact from fiction and cover what a collection agency can and cannot do, when to escalate an account, how payment plans actually work, and more.

This quiz is designed specifically for small business owners and office managers who deal with accounts receivable collections, unpaid invoices, or overdue customers. If you’ve ever hesitated to take action because of what you “know” about collections and collection agencies — this quiz is for you.

Debt Collection Myths

1 / 16

Allowing a debtor to make partial payments or go on a payment plan can increase your chances of collecting the full balance.

2 / 16

Taking legal action is faster and more effective than using a collection agency.

3 / 16

Instead of using a collection agency, I should factor or sell my old unpaid accounts.

4 / 16

The amount of time before collection efforts should begin depends entirely on who the customer is and how big the balance is.

5 / 16

If a consumer owes my company money and I don’t have their Social Security number, there’s no point in submitting it for collections because it can’t be credit reported.

6 / 16

You should expect any debt collector to treat your customers with the same professionalism as you do.

7 / 16

There is no point in submitting small unpaid balances.

8 / 16

If I turn my customers over to collections for not paying, I’m going to get bad reviews.

9 / 16

A collection agency should always work on a contingency (no collection, no fee) basis. Anything else is unfair.

10 / 16

You should go back through your accounts and submit everything that hasn’t paid for the last 10 years.

11 / 16

A collection agency is often more tightly regulated than the businesses it serves.

12 / 16

A debt collector isn’t doing his job unless he calls the debtor repeatedly and aggressively pressures the debtor to make payment.

13 / 16

Collection agencies can and should take money from a debtor’s bank account or garnish wages to pay a debt.

14 / 16

A collection agency can actually improve your chances of keeping a customer relationship intact.

15 / 16

When you send an account to collections, you’ll only recover a small fraction of what you’re owed.

16 / 16

A collection agency can help spot problems in your own invoicing or credit practices?

Your score is

The average score is 56%

0%

Done with the quiz? How did you do? Were you surprised by any of the answers? Most people are, so don’t be too surprised if you got a couple wrong.

Here’s one final question for you – guess before you Google! Who said “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.”

Did you get it? I thought I knew but …

If you’ve got overdue accounts or want help setting up a smoother collections process, we’ve got options.
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Other posts you might find useful:

When to escalate an account to Bad Debt Collections

How to Send Someone to Collections

Summary

Most small business owners aren’t sure when to escalate an unpaid invoice — or what happens after they do. This quiz is a great first step toward clearing up confusion and avoiding costly delays. Whether you’re managing your accounts receivable in-house or exploring third-party options, understanding how the collection process works can help you take action with more confidence. From payment plans and partial settlements to skip tracing and credit reporting, there are more tools available than most business owners realize. Take the quiz, check your results, and let us know if you’d like help moving forward.