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Government debt collection differs from ordinary debt collection in several crucial ways. Debt collectors who go after people who miss the due date on their credit cards or skip mortgage payments have one set of skills, but debt collectors who work for the government need another set entirely.

Government debt collection can range from local municipalities collecting on their water bills, to the IRS going after people for lack of filing. On the municipal level, governments get their revenue from the state, the federal government, and local revenue streams such as library fines, parking tickets, and traffic violations. Since both state and federal aid has decreased of late as a reverberation of the poor economy, collection on the local level has become crucial to keeping the government running smoothly.

Parking tickets and traffic violations have a built-in system to ensure prompt payment. The scofflaw who ignores them will find himself or herself in jail eventually. However, when it comes to utility bills, debt collection can prove more of a challenge.

There are other areas where government debt collection is more of a challenge, such as unpaid utility bills or unpaid taxes. Since local governments receive about one third of their operating funds from the state, one third from the federal government, and the rest from these local sources of income. Municipalities have faced challenges as federal aid and state aid have diminished due to economic hardship. Government debt collection is now an important source of revenue.

Once a bill has been unpaid for more than 60 days, the chances that it will never be paid rise steeply. If you’ve been unable to collect on a bill past the 60 day mark, it’s time to get a professional debt collector that is familiar with government debt collection involved. A good agency will know how to coerce people to pay on default accounts.

Another option is to hire a collection agency that will do all of your billing from the beginning. Local governments can find significant cost savings with this method because it eliminates the middle of the process. When an account goes into collections the agency can take care of it immediately without having to transfer information.

If you choose a collection agency that offers first party billing, they handle the billing for the utility company from the beginning. This saves time and money for the utility company because if an account falls into collections the process of starting debt collection in earnest is seamless. One of the main costs when it comes to government debt collection is mailing costs.

In addition, government debt collection can be expensive to execute due to the cost of mailings. Giving your billing to a specialized debt collector can significantly reduce costs since they bulk mail. A collection agency that specializes in government debt collection can be a serious boon for most municipalities. They are simply able to recover more money at a lower cost than in-house collections, and what business manager doesn’t want to improve cash flow like that?