According to a recent article in The Cleveland Plain Dealer, the Cleveland Public Library has hired a national collection firm to recover fines and overdue items. Director Felton Thomas reported that the agency had collected $550,000 in fines and $2.6 million worth of outstanding material; and fees were less than $90,000. So it would seem that using an outside agency for collection will continue. Other libraries have taken similar action.
My point in bringing this article to your attention is not simply the fact that libraries are now using outside collection agencies. The main point is that almost all creditors seem to be getting more and more aggressive in their collection efforts. For example, real estate developers and business owners in the past could reasonably assume that a bank would not immediately call a loan if you failed to meet certain financial covenants. That is simply no longer the case. Having been burned by so many bad real estate loans, banks and other lenders are not going to be as lenient as they used to be if any problems develop with your loan.
Stated another way — if even libraries are using collection agencies, you can imagine what might happen with your business or real estate loan if your circumstances suddenly change. All of this makes asset protection planning more important than it was in the past.