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Overcoming Challenges in Government and Municipality Debt Recovery

Overcoming Challenges in Government and Municipality Debt Recovery

Government agencies depend on payments from the public to fund the services they provide. Delinquency causes agencies to attempt great feats with fewer resources, creating a cycle of inefficiency. Prioritizing debt collection is crucial to any government or municipal organization. 

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The Debt Landscape for Government Agencies

Debt collection has become more difficult for government organizations of all functions and sizes, resulting in increased delinquency. One of the most notable examples of increased delinquency involves government loans, for example Federal Housing Authority (FHA) mortgage loans. While the percentage of delinquent FHA loans has decreased since 2020, 9.5 percent were delinquent in the third quarter of 2023. 

The Challenges in Revenue Collection for Government Entities

Collecting past-due debt is more difficult for today’s government agencies. Messages that pass through typical lines of communication like landlines and mail are less likely to reach customers as more individuals and businesses move to online platforms. Then, when debt adds up, the agency has less to invest in its recovery efforts. Skip tracers see less success as they stretch their resources thin. 

 

Strategies for Enhancing Collection Services in Municipalities

Government agencies can overcome today’s debt collection challenges by implementing calculated recovery strategies before and after delinquency occurs. 

Risk Analysis

Agencies must understand the potential for delinquency through careful analysis. Internally, an agency can analyze its debt recovery practices and tools to determine which efforts succeed and fail. Externally, analyzing outstanding economic factors and key delinquency indicators helps agencies prepare. Agencies can also analyze delinquent accounts to determine groups that are most likely to repay and calculate the cost of targeting each group. Narrowing their focus to customers with the greatest investment-to-return ratio maximizes the value of each balance resolution. 

Communication

Thorough communication before and after delinquency can raise recovery rates. Agencies can mobilize outreach efforts to ensure those who owe know their balance and due dates. Communication can also occur before a balance accumulates. Agencies can use public outreach efforts to increase awareness around debt responsibility, payment options and delinquency consequences. 

When delinquency occurs, a missed payment notice can remind an individual to resolve their balance. Personalizing customer communication across multiple channels can improve engagement with the agency’s outreach efforts, as can opening channels for two-way communication. 

Collaboration Between Agencies

Debt recovery challenges are prevalent across a wide range of government agencies. Local municipalities, police departments, departments of transportation, public school systems and various other organizations experience overlapping delinquency issues. Collaboration can be an effective solution. When separate organizations share records and resources, all parties involved can boost their chances of debt recovery.

Debt Collection Automation

Automation solves two debt collection channels that government agencies face. By automating processes like invoices, payment reminders, payment confirmation and follow-ups, the agency can reach more customers each day while employees dedicate time to high-value tasks. Automation can also improve reporting accuracy and integrity in accordance with the Sarbanes-Oxley Act of 2002. 

 

Leveraging Expertise From Southwest Recovery Services

Southwest Recovery Services is a diligent, professional debt recovery organization providing first-party and third-party services. Our comprehensive debt collection solutions ensure crucial government and municipal organizations can fund daily operations with complete, timely payments. From skip tracing and customer location through predictive analysis and customer outreach, we will take on your most channeling cases while you focus on observing the public. 

 

Why Trust Us for Debt Recovery Services?

Debt recovery requires persistence and a proven strategy. At Southwest Recovery Services, we have spent more than 20 years collecting payments from our clients’ delinquent account holders. We have extensive experience serving as a debt recovery partner for government and municipal agencies of various sizes and in multiple states. 

Each Southwest Recovery Services client receives a custom recovery strategy that accounts for the most specific nuances of their field and the intricate legal requirements that state and local policies enforce. For government agencies, we prioritize efficiency and diligence to maximize the value of each recovered payment and comply with relevant laws. 

Our clients trust us because we back our effective methods with full commitment to their needs. Your success is our success, so we will always do what it takes to achieve the best outcome and eliminate risk. 

 

Learn More About Our Municipal Collection Agency

A well-crafted debt collection strategy will improve recovery rates and give your organization more financial flexibility. Southwest Recovery Services will represent your organization at every stage of debt collection, so contact us online to discuss your situation. 

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