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Placement timingEvery month an account sits unworked, it's worth less. Here's how to set a placement rule from your own data, with the legal clocks that can force the date.
Place an account when your own effort has stopped paying: the customer has gone silent after your full reminder cycle, has broken a promise to pay, or has moved. For many creditors that falls between 90 and 120 days past due. Set the exact day from your own recovery curve, and earlier when a legal clock is running.
Accounts lose value as they age. The clearest public evidence is what debt buyers pay. In the Federal Trade Commission's 2013 study, buyers paid an average of 7.9 cents per dollar for card debt under 3 years old, under $1,000 and never placed with an agency, 3.1 cents for debt 3 to 6 years old and 2.2 cents for debt 6 to 15 years old. Buyers price what they expect to collect, so the slope tells you how fast recovery odds fall.
The FTC data is old and covers bought debt. The direction holds for placed accounts, and your own curve will show the speed.
Days past due is the default trigger, but behavior tells you more. Any of these should move an account to an agency regardless of age.
| Signal | What it usually means | Typical action |
|---|---|---|
| No response after your full letter, call and email cycle | Your channel has stopped working | Place with an agency |
| Two broken promises to pay | The plan isn't realistic or the customer is stalling | Place, with the promise history attached |
| Mail returned, phone disconnected | The customer has moved | Place for skip tracing quickly; trails go cold |
| Customer disputes the balance | It may be a service or billing problem | Resolve it first; don't place a live dispute without the record |
| Business customer stops paying all vendors | Insolvency risk | Place fast, and ask about legal review |
| Balance below your cost to work it | It won't pay to chase in-house | Place in a batch or write off |
Pull 12 to 24 months of paid accounts and plot cumulative recovery by days past due. You'll see where the curve flattens, the age after which your team recovers very little more. That flattening point is your latest sensible placement day.
Then set the earliest. Run the in-house vs outsourced calculator on accounts at 60, 90 and 120 days. The first age where agency net beats in-house net is your earliest day.
Your rule lives between those two points. Write it down, apply it every month and review it twice a year.
Some rules move the decision out of your hands.
Statutes of limitations. Once the limitation period runs out, a debt collector "must not bring or threaten to bring a legal action" on the debt (12 CFR 1006.26(b)). Periods vary by state and debt type. Waiting can remove the option of suit entirely.
Hospital and health system rules. A nonprofit hospital covered by section 501(r) must wait at least 120 days from the first post-discharge statement before most extraordinary collection actions, and must give 30 days' written notice first (26 CFR 1.501(r)-6). Placing an account with an agency isn't itself on the list, but what the agency does next counts as the hospital's own action. EBO, early-out and bad debt covers how hospitals stage this.
Bankruptcy and deceased accounts. Scrub them before you place. Any good agency scrubs again on arrival.
The agency starts from what you give it. Send the balance and itemization date, the last payment, contact attempts, every promise and dispute, cease-communication requests, attorney or bankruptcy notices and channel consent.
Missing data is the main reason a fast placement turns into a slow start. How an account moves from placement to close lists what an agency checks before the first contact.
If the customer is worth keeping, a firmer step in your own name often cures accounts at 60 to 90 days. Demand letters and early reminders and first-party vs third-party collections cover that stage.
When TSI receives a placement, validation notices, scoring and first skip tracing start within 24 hours, and contact attempts typically begin within 48 hours.
Results vary by portfolio, including account age, balance and type, and by client program.
There's no legal standard for most creditors. Many place between 90 and 120 days past due, earlier when the customer has gone silent or moved. Your own recovery curve should set the day.
Often yes, in batches. Small balances cost the same staff time as large ones, so they're usually the first to stop paying in-house. An agency spreads that cost across volume.
Federal law doesn't require a creditor to warn the customer before placement, though many send a final notice as good practice. Some state rules, contracts and 501(r) for nonprofit hospitals add notice steps. Check with counsel.
Resolve or document the dispute first. If you place it, send the dispute record with it, so the agency can handle it under Regulation F instead of starting collection blind.
General information, current as of Nov 5, 2026. It isn't legal advice. Rules change and differ by state, so check the sources linked here and talk to your own counsel before you act on it.
The Recovery Performance Diagnostic plots your recovery curve on one portfolio or segment, sets baseline economics and designs a measured carve-out at the placement age you choose.
