I have written extensively about the value of a written contact in collecting debt. While oral contracts may be considered valid in some places, they are at very best subject to interpretation.  And trust me, in the event of a payment dispute, your customer would always remember it differently!

Contracts may also be used to reduce your cost of collection. If your customer agrees (in writing) to pay collection costs, at least part of those costs may be recovered by your collection agency, depending on state law. 

Here is an example of a collection we made today that would not have been possible without a contract. I was working on a debt owned to a medical provider. The debtor is gentleman who was happily married at the time, and covered under this wife’s insurance policy. At the current time however, the couple is in the throes of a contentious divorce process. Hubby hired an attorney who contacted me and told me that the wife was responsible for the bill, since her insurance was billed.

“Not so fast,” I said, and produced my client’s patient intake form, which demonstrated that hubby had agreed, in writing to pay any costs not covered by insurance. I forwarded the information to the attorney and this morning, the bill was paid. 

Without a contract, it would have been much more difficult to prove. At some point, the wife said she would pay the bill, but now that the honeymoon is over, she