The impact of Tax Season on Debt Collection Debt Collection during Tax season is similar to the holiday season in terms of debt collection. According to the National Retail Federation, 35.5 percent of shoppers getting a tax refund this year plan to use it to pay off debt. As a result, many in the industry consider mid-February until May to be the most productive season of the year for debt collection. We were keen to see how tax season might affect our business against standard collecting methods. Collections growth in the first half of February followed a similar pattern to prior months. We noticed a substantial increase in customer involvement and debt payments as the first wave of tax refunds arrived in consumer bank accounts in the second to last week of the month. We anticipate that tax returns more than doubled our month-over-month collections rise in February after accounting for a seasonal adjustment. Composition of Payments and Commitments Has Changed When comparing one time payments and payment plans, payment plans as a percent of revenues have increased over the years. And we continue offering more flexible payment choices to customers. As tax season approached, we noticed a 2x spike in one time transaction as a percentage of total revenues. By focusing on payment arrangements, we can emphasize the impact of tax refunds even more. As more people are able to afford shorter-term plans, the average installment amount per plan has increased. This is a pattern we've noticed across our client base, with varying degrees of influence depending on the client. Can a collection agency sue the Internal revenue service for my tax refund? The federal government will only withhold or pay your tax refund to one of your creditors if you have four forms of debt. State income taxes, child support payments and money owed to other federal agencies, such as unpaid federal student loans, are all examples of these debt collection services. As a result, debt collection services in India are hired by other creditors to collect money from you and are unable to stop your tax refund. If you can't pay your monthly credit card payment and the firm sends your account to a collection agency then You must be conscious. Yet, that depends on the region and these 3rd party debt collections may have alternative options for collecting payment from you. Collection companies are given permission by state laws to set off your salary or seize your bank accounts. A collection agency may be able to seize your tax refund once it has been placed into your bank account. If you request that your tax refund be placed into your bank account and if the collection agency is able to levy that account, the levy applies to all your available cash, including your tax refund. Our Business Information Reports is one of the most trusted sources of business data, we can help you analyze the profitability of the company, economic stability, and payment efficiency. For any assistance, you can contact us on +91-9810010294
