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Updated Oct 26, 2023

What Is Skip Tracing In Debt Collection?

What Is Skip Tracing In Debt Collection?

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Max Freedman, Business Operations Insider and Senior Analyst
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This guide was reviewed by a Business News Daily editor to ensure it provides comprehensive and accurate information to aid your buying decision.

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Skip tracing is a process used to find a debtor who has relocated or disappeared to avoid legal responsibilities, such as debt payments. The skip tracing process involves verifying a debtor’s information, searching public records and contacting people who know the debtor. Hiring a skip tracer can save you time but can cost a substantial portion of the amount you’re owed.

How does skip tracing work?

Skip tracing is the process of finding someone who has relocated or otherwise disappeared. Usually, these individuals have relocated or disappeared because they’re hoping to skirt certain responsibilities, such as paying debts. Skip tracing is not quite the same as detective work or bounty hunting, which can end with an arrest. Skip tracing is often included in the debt collection process as it can help creditors find those who owe them money.

Editor’s note: Looking for the right collection agency for your business? Fill out the below questionnaire to have our vendor partners contact you about your needs.

Who uses skip tracing tactics?

Skip tracing is a common tactic used in debt collection. If you hire a debt collection agency to seek payment from an unresponsive debtor, the agency may use skip tracing in hopes of finding the debtor.

Debt collection agencies have more time and skills to devote to locating such a debtor while you likely have other work that takes priority. Additionally, detectives, private investigators, journalists, reporters and attorneys commonly use skip tracing.

Skip tracing tactics are commonly used by collection agencies to locate a debtor but detectives, journalists and attorneys also use them to locate individuals.

How do you know if skip tracing is necessary?

If a nonpaying client who owes you money goes incommunicado, you might think that skip tracing is necessary to find them. However, skip tracing isn’t always necessary. Sometimes, you can find the information yourself.

That’s because, unlike when skip tracing first emerged, the vast majority of information is now available online. Search engines and social media platforms mean that, theoretically, you can complete the early steps of skip tracing yourself. Sometimes, you can complete a skip trace entirely on your own but, if not, a more experienced skip tracer can get the job done.

What is the skip tracing process?

Should skip tracing prove necessary, it will typically proceed in the following order.

1. Your skip tracer verifies the debtor’s information.

It’s possible that the reason why you’re not hearing from a debtor is that you don’t have the correct contact information for them. Skip tracing starts with the simple step of verifying the debtor’s contact information.

If you’re lucky and the skip tracer identifies the correct contact information quickly, you can reach out to the debtor and ask them to pay what they owe you.

2. Your skip tracer collects publicly available information on the debtor.

Not everyone likes to search through informational databases in hopes of finding helpful information about a given topic ― sometimes it’s there, but if not, you’ve lost valuable time. If this time-consuming, often frustrating process isn’t your cup of tea, a skip tracer can do the work for you.

A skip tracer will check public records, such as the following, to learn more about your debtor:

  • Address history
  • Travel history
  • Court records
  • Credit card applications
  • Credit reports
  • Criminal records and background checks
  • Driver’s license history
  • Job applications and history
  • Loan applications and history
  • Phone number records
  • Search engines
  • Social media
  • Tax records
  • Utility bills
  • Vehicular history

With information gleaned from these records, your skip tracer may connect the dots and locate your debtor. If they are unsuccessful, they may take other steps.

3. Your skip tracer contacts the debtor’s family and friends.

Friends and family members of the debtor can often help a skip tracer locate a debtor, although they may not always do so willingly (and should never be forced to do so against their will).

If friends and family prove unhelpful, try contacting the debtor’s current and previous landlords, neighbors or co-workers. These people may offer clues to where the debtor can be found.

Key Takeaway

The skip tracing process involves verifying a debtor’s information, searching public records and contacting people who know the debtor.

How skip tracers complete the skip tracing process

You might feel that you can handle skip tracing by yourself. This notion isn’t necessarily untrue, but professional skip tracers are more suited to handle the process since they have access to skip tracing software that might be too expensive for your use. You’re likely not skip tracing debtors on a regular basis but, when you do occasionally need to skip trace an individual, professionals may serve you better.

Professional skip tracers use software that may be too expensive for individual business owners or freelancers.

Should you hire a skip tracer for debt collection?

If you’re a business owner or a freelancer who has a nonpaying client, you probably have enough on your plate that hunting for someone you might never find is entirely unappealing. That’s why many debt collection agencies offer skip tracing services.

Since debt collection agencies specialize in contacting debtors, they may find missing contacts and have more success convincing debtors to pay than you might. Additionally, since debt collection is their job, they have more time for this task than you do.

That said, you’ll pay your fair share of money to hire a debt collection agency. Often, these agencies keep 25% to as much as 50% of the debt as their fee. If you feel that the cost of hiring a debt collection agency is worth it, our collection agency reviews can help you choose the right agency for your needs. Hopefully, you’ll find your debtor ― and collect the money you’re owed ― before you know it.

Skip tracers can help you secure overdue payments

If a client who owes you money has given you the slip, it might be time to bring in a collection agency that employs skip tracing. If repeated attempts to collect a debt owed to you have failed and you can no longer find the person who owes you, skip tracers give you hope of claiming what you’re owed. If you’re not ready to cut your losses, a debt collection agency that offers skip tracing could be right for you.

Tejas Vemparala also contributed to this article.

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Max Freedman, Business Operations Insider and Senior Analyst
Max Freedman has spent nearly a decade providing entrepreneurs and business operators with actionable advice they can use to launch and grow their businesses. Max has direct experience helping run a small business, performs hands-on reviews and has real-world experience with the categories he covers, such as accounting software and digital payroll solutions, as well as leading small business lenders and employee retirement providers. Max has written hundreds of articles for Business News Daily on a range of valuable topics, including small business funding, time and attendance, marketing and human resources.
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