There are many companies which have the operations all over the country. As the company deals with the various clients and organizations. Hence it is very likely to have the financial pendency over the parties. Some of them continue to have business whereas there are few who leave the business and hence the pendency converts into bad debt for the company. Similarly there are many loaning companies which are in the process of collection in the state. Every state has certain rules for licensing of debt agencies. You must checkout Collection Agency License Requirements by State to know the licensing requirements.
Companies which are exempted from the licensing
- If you are running a business in other state and collecting your debt from the persons located in the state, but you are not present physically in the state to collect the loan. You are communicating through, phone, and e- mail. Then you need not to apply for the licensing as such companies are exempted from license.
- If you are running a business and collecting your debt from dealer network then you are not supposed to apply for the licensing of the collection agency. Anyone who is collecting commercial debt from business to business is free to collect the payments from the party without requiring any licensing fees.
- The company which is in the business of purchasing the bad debt from the companies which found it quite difficult to collect the debt from the person or the agency are also exempted from applying for the licensing of collection agency.
- Law firms which are present in the state and are collecting the debts from the people on behalf of their clients are also provided the exemption from the license of the collection agency. They can send notice to the debtors of their clients and direct them to send the money to the authorized agent of the company.