Your ARMor

The UCS Newsletter, providing A/R management and debt collection insights, with the commitment of maintaining the important balance between

Results and Relationships
 vol. 4 issue 1
Table of Contents

Got Receivables? Time is of the Essence!

Collecting on Old Bad Debt Accounts: How Long is too Long?

Insurance Claims Collection

Fun Time Facts
You have been great to work with on this unfortunate issue.  Thank you so much for your kindness.  Please apply this check to reference # XX-XXXXXXXXX.

Thanks so much,

          a consumer


I want to thank Krys for being so polite and helpful.  She is an asset to you company.


       a consumer

I, personally, would like to commend Krys at United Credit Service for all of her patience and assistance during this paperwork fiasco. She has been very helpful and I truly appreciate the help and excellent customer service.

     a consumer

Hi Shirley,

Thank you for always  treating me with respect when you call.  I'm sure you're the #1 collection person.  Could you please send me the paid-in-full letter for both accounts?


        a consumer


Be it good or bad we live in a place (the United States) and time (the 21st century) where things move very quickly.  We all seem hell-bent at doing things faster and faster. Just think about the internet. Isn’t it crazy to think about how much information we have at our fingertips and how quickly we can access it?  Of course, our country isn’t the only one obsessed with time, everyone wants in on the action.  Look at European and Asian countries with their bullet trains, rapidly moving escalators, and speedy knee-buckling elevators. Germany has claim to the world’s fastest car and I read somewhere that China has a computer that’s 4000 times faster than Apple’s most powerful Mac—seriously, 4000 times faster?

Our need for speed stems from the fact that time is a finite resource.  There are only 24 hours in a day and 7 days in a week and nothing we do will ever change that.

I recently hit a big milestone in my life, I turned 60-years-old. Let’s just say I’m acutely aware of what a precious commodity time really is. I feel extremely fortunate that I was able to spend the extra leap year day in February celebrating with family, making memories with my four-year-old grandson and two-year-old granddaughter!

If you were to ask me to describe—using only three words—an important thing to remember when considering debt collection, I would say, “Time is money.” Ben Franklin coined that phrase and I’m not surprised. Franklin was a Jack-of-all-trades, but not in the traditional sense, he actually was a master of them all!  He was a leading author, printer, civil activist, Freemason, postmaster, scientist, inventor and more.  I could go on, but you get the gist. Clearly he was a man who knew the value of time and used it judiciously.

Since most of us are not like Ben Franklin and proficient in many different professions, in this issue we focus on the ticking clock and how it relates to your business and ours. We will discuss the timing of placing accounts for collection, the Statute of Limitations, and our program, Insurance Claims Collection, and how it can help you from losing money to ‘timely filing deadlines’.

If you have any questions after reading the articles, please email me.  We are happy to share our expertise with you.

With only so many hours in a day, it is important—in both our professional and personal lives— to prioritize what’s important and figure out where our time is best spent.

Best regards,

Got Receivables?  Time is of the Essence!    
As you can see by analyzing the graph at the left provided by insideARM, the value of a businesses’ receivables will rapidly deteriorate over just a short period of time.  This graph illustrates that a business extending credit will only collect somewhere between 20%-60% of the outstanding receivables once they reach 90-120 days of age.

Unless you have a business like ours, managing accounts receivable and recovering unpaid customer debt is not one of the reasons most business owners started their enterprises.  While discussing delinquent receivables I often hear, “My customers are not paying on time!” and “It takes too much time to track down unpaid invoices and find these people!” or “I don’t have time to call these delinquent accounts!” and “I’m spending a fortune mailing these delinquent notices!”  The recurring theme is business owners’ time is valuable and they did not plan on or want to dedicate so much time, effort, and money into collecting unpaid receivables.

During these discussions, I am typically asked the same couple of questions: “How long should we pursue unpaid accounts ourselves?” and “When should we turn over our delinquent accounts to a collection agency?”  If you are looking at that insideARM graph, your takeaway should be the sooner the better: The quicker a creditor acts upon an unpaid account, the better the chances are they will successfully obtain payment.  Conversely, the creditor who procrastinates, ignores or holds onto delinquent receivables too long can expect to recover much less.  Indeed, properly managing delinquent receivables requires a timely balancing act to achieve the desired recovery rate.

If you want to increase your recovery rate, most experts in the accounts receivable management field will recommend delinquent accounts be turned over to a third-party collection agency by the 90 day mark. However, situations may arise that warrant quicker action.  The age of the account is only one of the factors you should consider when determining when to turn a delinquent account over to a collection agency.

Beside the passage of time, what are the signs that a debt is unlikely to be paid?  When communication breaks down between the debtor and the creditor, there may be little choice but to turn the delinquent receivable over to a collection agency.  A debtor that promises to pay, but does not follow through by the deadline is a big red flag.  Additionally, any past-due receivable that has mail returned or has disconnected phone numbers ought to be turned over to a collection agency at any point in the aging process.  According to Business News Daily, it’s time to start thinking of turning over that delinquent receivable to a collection agency when:

  • New customers do not respond to your first attempt to collect the debt.  When you do not have a history of transactions with the customer, there is a greater chance they will refuse to pay or never intended to.
  • You’ve agreed to a payment plan, but the customer does not follow through.  Customers who still won’t pay after you’ve agreed to meet them halfway with a payment plan are unlikely to change their minds.
  • A customer completely denies responsibility for the debt.  Without a collection agency, these debts are rarely recovered.
  • The customer makes unfounded complaints about your business, product or service as an excuse not to pay.  Most of the time, these complaints are just an excuse to get out of paying the debt.
  • The customer is going through a serious personal situation such as a divorce.  Often, one spouse blames the other for the debt.  A collection agency will be able to get to the bottom of who is responsible.

Deciding if or when to turn  delinquent receivables over to a professional collection agency is, of course, a personal choice.  But once it becomes clear you’ve exhausted all your options, communication has broken down with the customer, and your time is being wasted, the delinquent account is better left in the hands of a professional collection agency before it’s too late.  Time is money.
   Collecting on Old Bad Debt Accounts: How Long is Too Long?

How old can a bad debt be before it is no longer subject to collection action?  This is a question that seems to have come up more frequently as of late, especially from our new clients.   

At a very high level, time is of the essence when it comes to maximizing the collectability of a bad debt. The old adage ‘the older it is the farther it goes’ is very true.  Additionally, the timeliness, quality and detail of the debtor’s account information is likewise critical to ensuring that collections communications commence immediately and directly with the debtor. 

That said, the age of the account does not necessarily mean the account is not collectable. In fact, UCS offers our SecondCollect service that will take on older accounts that another agency may have worked with no success.  Sometimes just a new set of eyes and a reinvigorated search can yield very positive results. Ask your UCS representative or shoot us an email if you have accounts like this you would like us to work on your behalf!

The longer answer is that the ability to collect on an older account is dependent on the laws of the state in which the debt was incurred.   For most of us the nuances of the laws of individual states means that when an account may no longer be subject to collections can be confusing at best.  There is, unfortunately, not a single, simple answer to the ‘how old’ question.

The good news for our clients is that our collections experts provide a thorough review of each account prior to initiating any collection actions including debtor status (that is, is the debtor exempt from collection actions because they have filed or are in bankruptcy, have an attorney involved—which limits our contact to the attorney, or are active-duty military) and that the age of the debt does not exceed that permitted by a state’s Statute of Limitations.

What is a Statute of Limitation? Each of the fifty states have created laws that limit the amount of time a creditor or debt collector have to file a lawsuit to collect the debt and the time frames vary depending on a given state’s laws.

A good definition is provided by ACA International: “Generally speaking the statute of limitations is the legally prescribed time limit in which a lawsuit must be filed. The statute of limitations sets forth the maximum period of time, after certain events, that legal proceedings based on those events may be initiated. The applicability of statutes of limitation varies from state-to-state and from case to case depending on the cause of action in the lawsuit."

Some states still allow some collection activities such as phone calls and letters after the Statute of Limitations, others do not.  Wisconsin, for example, where we are located, does not allow any collection activity after the 6 year Statute of Limitations is up. 
Our recommendation is that our clients consult with our experts if there is a question on the Statute of Limitations for a particular state.  We also highly recommend that our clients consult with legal counsel prior to initiating any legal action on their own to ensure the debt is still collectable. As part of our services, our legal experts do a thorough review of all aspects of the debt, including the age of the account and that it is not beyond the Statute of Limitations for a particular state.  We will never recommend pursuing a debt that is not legally sound and that we don’t feel has a very good chance of receiving a favorable judgement. The collectability of the judgement is also considered before a recommendation for litigation is considered. 

Is there a short answer to the question of how old an account can be and not be collectable?  Well, unfortunately no. It can vary depending on whether or not certain agreements were made with the collector by the debtor, which in some cases can reset the clock on when a Statute of Limitations may kick in.  Payments made by the debtor, for example, toll or reset the clock.  And of course, once a judgment is obtained, it’s a whole new ball game. In Wisconsin judgments are collectable for up to twenty years.

Our clients have come to trust that before we recommend any action especially legal action against a debtor we have thoroughly vetted the nuances of state law to ensure the maximum collectability of the account and avoid unforeseen legal complications.

Do you have questions about a particular state and its Statute of Limitations?  Just ask by emailing your questions.  We are your experts and are always here to help.

Insurance Claims Collection
Accelerate your revenue cycle and improve cash flow as your aging accounts receivable balances decrease

As you know, getting insurance companies to pay on submitted claims can be a very tedious and time consuming task.  Delaying and/or denying  payment is such a common occurrence in the health insurance world your precious resources—time and money— are constantly being squandered as employees chase down payments by having to review, evaluate, call and cajole the insurance companies, and then finally resubmitting the claim, hoping for better results.

United Credit Service, Inc. can effectively maximize insurance claim collections by using experienced Insurance Claim Collection Specialists coupled with our high-tech customizable insurance collection process.  UCS’s low cost solution to this accounts receivable challenge utilizes:

  • Computerized workflows and system decision logic – This increases the efficiency and productivity of our Insurance Claim Collection Specialists.

  • Effective computer generated work lists that are prioritized by account characteristics – With our clients; we strategically analyze and prioritize the accounts by Financial Class, A/R balances, and/or age of account—don’t lose any more money because of timely-filing limits.  

  • Experienced, knowledgeable Insurance Claim Collection Specialists – our Specialist have been trained in medical billing and have many years of experience solving medical reimbursement issues. They know how to crack the bureaucratic code that stands in the way between you and your money.

  • Standard and customized reports – We provide standard activity reporting, but can also customize reports for clients. If UCS identifies trending in billing errors, we will notify our business partners to eliminate those recurring insurance denials.

  • We work as an extension of our business partners, not an outside billing and collection company – this allows us to work directly with Medicare, Medicaid, and commercial insurance companies.  With access to a clients’ billing system, we can research claim disputes, rectify denials and resubmit corrected claims all while fully documenting everything in a client's own system.

  • Accelerate your revenue cycle and improve cash flow as your aging A/R balances decrease 
Did you know...

According to the Oxford English Dictionary, time is the most frequently used noun in the English language.

The phrase a New York minute originated in Texas in 1967. It was used to describe the hectic pace of New York.  New Yorkers were said to do in a second what would take Texans a minute to do.  Johnny Carson popularized the saying when he said, " A New York minute is the time between when a traffic light in Manhattan turns green and the guy in the car behind you honks his horn." 

The word jiffy is an actual unit of time which varies depending on which field of science is using it. In physics and chemistry, a jiffy is the time it takes for light to travel one centimeter.That's pretty darn fast!

Hate waiting in a line?  Research has shown that, on average, people overestimate the time they wait in a line by over 36 percent. And it appears as if instinct works against us. When given the choice between a long fast-moving line or a short, slower-moving one, more times than not, people will choose the shorter line even if wait times end up being the same. I'm happy to hear it's not just me!  

United Credit Service, Inc.
15 N. Lincoln Street, P.O. Box 740
Elkhorn, WI 53121