Know the Rules – Extending Credit






We have a customer who is asking us to change our billing and contact information to her company name.  Does it make a difference?  Should I have her sign new financial forms?

It may make a big difference, particularly if you are extending credit to this customer.  If this customer’s company is a corporation or an LLC (limited liability company), the change she is requesting will affect your ability to recover any unpaid balance.  It sounds like you already have a signed agreement with  your customer for payment.  That does not mean you have a signed agreement with her company.

Under the law, a corporation or an LLC is considered to be a separate legal entity capable of contracting for services.  For example, if your agreement is with Julie and Julie fails to pay as agreed, you could pursue Julie under the terms of your agreement.  You don’t have a right to pursue ABC Corporation, even if Julie is involved with that company.  The reverse is also true – if you have an agreement with ABC Corporation only, you don’t have the ability to pursue Julie (except in very limited circumstances).

I recommend that you have your customer sign a personal guaranty.  A personal guaranty is an agreement by an individual to pay the obligations of another entity.   Guaranties can be a separate agreement or a provision within an agreement.  Important elements are as follows:  clearly identify the entity (ABC, LLC), include a statement that you are conditioning the extension of credit on a valid personal guaranty, and  include a statement that you may proceed to collect against either the business entity or the individual.

It is not enough to have a good form – as always, make sure that your staff has training on how to fill out the personal guaranty.  The personal guaranty must name the correct entities in the correct capacities and have the correct signatures.  For example, it is not effective to have a personal guaranty of company obligations where the person signing the guarantee signs in their corporate capacity, for example, Fred Jones, President of ABC Corp.  Instead, he would need to sign as Fred Jones.

Whenever you extend credit to a business entity, I suggest that you require a personal guaranty.  If the individual is not willing to provide that guaranty, then you have a business decision to make about whether to take on that risk and extend credit. 

  collection   Feb 03, 2015   Uncategorized   0 Comment   Read More

Are You Responsible for Your Child’s Medical Expenses?



According to our divorce decree my wife is supposed to provide medical insurance for our minor child. She recently changed jobs and her insurance lapsed. Our son broke his arm and now the hospital is after me to pay the entire bill. Am I responsible?

Yes.  Generally, a parent is responsible for obligations incurred on behalf of their minor children. Because the law views a minor child as unable to contract for services (Idaho Code 29-101), the hospital cannot proceed against the minor child for payment.  Instead, the parent of a minor child is required by law to provide “necessaries” on behalf of the child.  (Idaho Code 32-1003) “Necessaries” would include medical attention.  The hospital has the legal right to seek payment from either parent, regardless of what your divorce decree states.

This law is designed to ensure that minor children receive the care that is needed.  Imagine the confusion and delay that would be caused if a service provider (like a hospital) were required at the time of service to ascertain which divorced parent will be financially responsible.

You may not be responsible if the minor child is not a child from your marriage, was not adopted by you and services were obtained after your divorce.

You are entitled to pursue repayment from your wife if the terms of the divorce decree state that she is responsible for medical expenses.

  collection   Jan 19, 2015   Uncategorized   0 Comment   Read More

Customer Retention: How CBI Can Help

It’s not unusual for consumers to have a negative opinion of collection companies, but you would be amazed to learn how often the same consumer also has a very negative view of the company who sent them to collections. In addition to recovering accounts receivables, we also understand that how our agents interact with consumers […]

  collection   Jan 16, 2015   Uncategorized   0 Comment   Read More

Breakfast with the Nampa Fire Department

Every year, CBI attends the Boys & Girls Club fundraising auction. This year CBI bid on, and won, breakfast with the Nampa Fire Department! On Saturday, September 13th CBI was honored to spend time with these brave firemen and women. We toured the facility, learned a lot, and ate a lot! A special thank you […]

  collection   Sep 16, 2014   Uncategorized   0 Comment   Read More

Looking back at what we’ve done to move forward.

The New Year is an ideal opportunity to reflect back at the many accomplishments of 2011 that will positively impact how Collection Bureau does business in 2012.

Collection Bureau expanded its law firm, adding two full-time attorneys and supporting staff. Collection Bureau’s attorneys argued a case to the Idaho Supreme Court and won. As a result, Collection Bureau’s government clients are positioned to recover criminal fines that may have otherwise been abandoned.

Collection Bureau attorneys were featured speakers at legal conferences regarding collections and mediation. They also spoke at a seminar, offered by Collection Bureau to medical professionals, which addressed how to deal with difficult HR issues.

Collection Bureau remodeled its website to make it more user-friendly. Clients can access account information with ease. Debtors can check their account status and make payments directly through the website. These changes have positively impacted Collection Bureau’s ability to communicate with clients. It has also provided debtors with an ability to stay current on their payments with just the touch of a button.

Collection Bureau invested in training and revamped internal processes – all with a view to increasing recovery while maintaining a professional approach. These efforts paid off as Collection Bureau was recently audited by the Idaho Department of Finance and received the highest possible ranking.

These are just a few in a long list of accomplishments. In 2012 Collection Bureau remains committed to conducting business with integrity and cultivating a reputation of fairness.

Take a break from the tyranny of the urgent and set goals for 2012 that will strengthen your business. Pausing to reflect is the first step to channeling inspiration.

  collection   Dec 20, 2011   Uncategorized   0 Comment   Read More
  • This communication is from a debt collector. This is an attempt by a debt collector to collect a debt and any information obtained will be used for that purpose.

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