Accounts that are not maintained in Good Standing, risk being sent to an Outside Collection Agency. Accounts sent to an outside agency for collection will be legally responsible for all collection costs involved with the collection of the account including, but not limited to, court costs, reasonable attorney fees, and any other expenses incurred with collection.
Accounts that are inactive for 120 days or more can result in listing of the balance as bad debt with local, regional, and national Credit Reporting Agencies. Any listing to a credit bureau will appear on your credit report for seven (7) years and can negatively impact your credit rating.
Calculation fo Collection Agency fees: Our collection agency charges 35% of total account balance for charges that are turned over that are < 1 year of age. For charges 1 year old or older, they charge 50%. These charges are subject to State Sales Tax. Our office calculates the total amount to be turned over to the collection agency based on these factors. The calculation that we use is as follows -
EXAMPLE FOR ACCOUNTS WITH BALANCE < 1 Year Old
(Total Account Balance Owed to Practice (TABOP) divided by (1.00 minus 0.35)) = Total Owed Before Tax (TOBT)
(TOBT minus TABOP) multiplied by .0825 = Sales Tax
TOBT plus Sales Tax = Total Turned Over to Collections (TTOC)
EXAMPLE: TABOP = $100.00
then: $100/(1.00-0.35)= $100/0.65=$153.85 TOBT
(($153.85 - $100) * .0825)= ($53.85 * .0825) = $4.44 Sales Tax
$153.85 + $4.44 = $158.29
Collection Agency will actually charge us ($158.29 *.35) = $55.40 * 1.0825 = $59.97
$158.29 - $59.97 = $98.32 paid to our practice for the $100 balance owed.
As you can see this calculation pretty closely represents the cost to our practice for placement with the collection agency. To avoid these extra charges...simply pay your bill timely, contact our office to make special arrangements (and stick with the arrangements made) or contact our office and work out an alternative payment due date.
