The Govenment Debt Collection Agency Proves Itself A Success
Increasingly, Governments are taking a dim view of debt owed to them. Collection of amounts owing to the Government has become big business and although the Government debt collection program in the USA is run by the Financial Management Service Department many of the collection functions are fulfilled by private debt collection agencies.
There is no doubt that the federal credit collection agency model has become the gold standard for Governments worldwide with other nations now carefully analyzing the processes followed to improve their own collection efforts.
All government departments at national and local level are encouraged to refer their outstanding and delinquent debts to the Financial Management Services department at the earliest opportunity. Leaving the debt outstanding for an excessive period before collection attempts are made has been proven to reduce the likelihood of amounts owing being recovered.
Departments that deal with taxation, child support and court fines now have a federal collections agency that will undertake the difficult process of collection on their behalf.
The Financial Management Service Department works closely with the Social Security Administration to reclaim debts from benefits paid. The Department has also been responsible for making regulations that allow garnishee orders to be placed on an individual’s wages – even when they are paid through the private sector.
A unique database called ‘Debt Check’ has been built by the Financial Management Services Department of the US Government and this is designed to make information sharing between different federal departments possible. Regular credit checks may not necessarily reveal federal debts outstanding so the new system closes this hole.
The collections agencies that operate on behalf of the Financial Management Services Department are required to abide by the numerous collections regulations that offer the individual protection from unfair duress. Although, they do have the back up of Federal Marshals once a court order regarding a debt has been made. These Marshals are required to follow federal procedures for the execution of court proceeding warrants and the seizure of federal debtor property.
Some debts to Government originate through a federal department error and in these cases, although collection of the money is required, it seems inappropriate for the matter to be passed to the Financial Management Services Department. Such incidences almost always involve those who are lowest paid and least able to meet their financial obligations. A sensitive approach to the recovery of overpayments of benefits and the such is required.
Every Government has had to examine its fiscal policies closely to make savings but belts can only be tightened so much. The other half of the book-balancing equation is not to spend less but to collect more, hence the new invigorated approach to Government debt collection and local government debt recovery. The approach appears to have been successful.
