Common Collector Mistakes
Even experienced collectors make critical mistakes that delay recovery, increase costs, or violate collection laws. Learn the most common pitfalls and how to avoid them to protect your collection rights and maximize recovery.
Read the First 72 Hours GuideEducation Only: This content is for educational purposes and does not constitute legal advice. Laws vary by state. Consult with a licensed attorney for guidance specific to your situation.
Strategic Mistakes
These mistakes undermine your collection strategy before you even start. Avoid them to set yourself up for success.
Not Acting Immediately After Judgment
The Mistake: Waiting weeks or months after obtaining judgment to start collection efforts. Debtors use this time to hide assets, change jobs, or file bankruptcy.
Why It Happens: Collectors assume the judgment itself will motivate payment, or they're unsure what to do next.
How to Avoid: Start collection efforts within 72 hours of judgment. Send demand letter, research assets, and document everything immediately.
Choosing Wrong Collection Method
The Mistake: Pursuing wage garnishment when debtor is self-employed, or attempting settlement when debtor has no assets and won't cooperate.
Why It Happens: Not researching debtor's financial situation before choosing collection strategy.
How to Avoid: Research employment, assets, and cooperation level first. Match collection method to debtor's situation.
Giving Up Too Early
The Mistake: Abandoning collection after one failed attempt. Debtor's financial situation changes over time—today's uncollectable judgment may be recoverable in 6-12 months.
Why It Happens: Frustration with initial failure, lack of long-term tracking system.
How to Avoid: Set calendar reminders to revisit uncollected judgments quarterly. Debtor may get new job, receive inheritance, or become more cooperative.
Documentation Mistakes
Poor documentation is the #1 reason collectors lose disputes and enforcement actions. These mistakes are completely preventable.
Not Documenting Communication
The Mistake: Relying on memory for phone calls, meetings, and verbal agreements. When disputes arise, you have no proof of what was said.
Why It Happens: Documentation feels like extra work, collectors assume they'll remember details.
How to Avoid: Document every interaction immediately. Use communication log template with date, time, content, and outcome.
Failing to Track Payments Accurately
The Mistake: Not maintaining updated payment ledger. Leads to disputes about balance, missed interest calculations, and inability to prove amounts owed.
Why It Happens: Manual tracking is tedious, collectors forget to update after each payment.
How to Avoid: Use collection ledger tool that automatically calculates interest and running balance. Update same day payment received.
Accepting Verbal Agreements
The Mistake: Agreeing to settlement or payment plan over phone without written confirmation. Debtor later denies agreement or claims different terms.
Why It Happens: Eagerness to close deal, not wanting to "complicate" things with paperwork.
How to Avoid: Never accept verbal agreements. Send written confirmation within 24 hours requiring debtor's signature before proceeding.
Legal Compliance Mistakes
These mistakes can expose you to legal liability, fines, or loss of collection rights. Compliance is non-negotiable.
Violating Fair Debt Collection Practices Act (FDCPA)
The Mistake: Calling debtor at work after being told not to, contacting at unreasonable hours, using threatening language, or disclosing debt to third parties.
Why It Happens: Frustration with non-payment, lack of knowledge about FDCPA requirements.
How to Avoid: Study FDCPA rules. Only contact debtor 8am-9pm, stop workplace contact if requested, never threaten illegal action.
Missing Statute of Limitations Deadlines
The Mistake: Waiting too long to enforce judgment. Most states have 5-20 year statute of limitations on judgments. After expiration, judgment becomes unenforceable.
Why It Happens: Not tracking judgment expiration dates, assuming judgments last forever.
How to Avoid: Know your state's judgment statute of limitations. Set calendar alerts 1 year before expiration to renew if needed.
Garnishing Exempt Funds
The Mistake: Levying bank account containing Social Security, disability, or other exempt funds. This violates federal law and can result in penalties.
Why It Happens: Not understanding exemption laws, assuming all bank funds are fair game.
How to Avoid: Learn federal and state exemptions. If debtor claims exemption, verify source of funds before proceeding.
Negotiation Mistakes
Poor negotiation tactics can cost you thousands in lost recovery or lead to failed settlement agreements.
Accepting First Offer Without Negotiation
The Mistake: Debtor offers 30% settlement, you accept immediately. You likely could have negotiated 50-60% with proper strategy.
Why It Happens: Eagerness to close case, fear debtor will withdraw offer.
How to Avoid: Always counter first offer. Start high (70-80%), negotiate down to acceptable range (40-60%).
Releasing Judgment Before Payment Clears
The Mistake: Filing satisfaction of judgment as soon as debtor sends check. Check bounces, but judgment is already released and can't be re-filed.
Why It Happens: Debtor pressures for immediate release, collector wants to close case quickly.
How to Avoid: Wait 10-14 business days for check to clear before filing satisfaction. Use cashier's check or wire transfer for large amounts.
Setting Unrealistic Payment Plan Terms
The Mistake: Agreeing to payment plan that exceeds debtor's ability to pay. Debtor defaults after 2-3 months, you're back to square one.
Why It Happens: Not verifying debtor's income, wanting higher monthly payments.
How to Avoid: Request pay stubs to verify income. Set payment at 10-20% of net income maximum. Better to have lower payment that succeeds than high payment that fails.
Cost Management Mistakes
Collection costs can quickly exceed recovery if you're not strategic. Avoid these expensive mistakes.
Pursuing Enforcement Without Asset Verification
The Mistake: Paying $500+ for garnishment or levy without confirming debtor has collectible assets. Sheriff returns empty-handed, you're out the fees.
Why It Happens: Assuming debtor must have assets, not wanting to "waste time" on research.
How to Avoid: Research assets first using skip tracing, public records, and debtor examination. Only pursue enforcement when assets confirmed.
Hiring Attorney for Simple Collections
The Mistake: Paying attorney 33-50% contingency fee for straightforward collection that could be handled DIY with templates and tools.
Why It Happens: Intimidation by legal process, not knowing DIY resources exist.
How to Avoid: Use attorney only for complex cases (bankruptcy, appeals, multi-state). Handle simple collections yourself with templates and guides.
Mistake Prevention Checklist
Before Taking Any Collection Action, Verify:
Avoid These Mistakes From Day One
Follow our First 72 Hours guide to start your collection effort with proper strategy, documentation, and compliance.
Read the Guide