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To Collect Or Not To Collect:
On Using Collection Agencies

Clinical Update
By Zur Institute

View a complete list of Clinical Updates.


In today's economy, with all its financial difficulties, questions regarding fees and debt collection from clients are especially frequent and relevant. In times of economic crisis, many people are dealing with the intense stress of mounting debt, losing jobs and income, and even losing their homes. Clients understandably seek psychotherapy to better cope with these stresses. However, these same stresses may mean they are not able to pay therapy bills. It can be viewed as a vicious cycle: to seek relief from stress only creates more stress. Many may decide not to seek therapy at all, even when urgently needed.

To collect or not to collect? It is a multi-faceted problem and many mental health professionals wonder whether debt collection is the answer for a financially delinquent client. In order to understand these complexities, one must explore the many relevant aspects of this issue, including professional, relational, clinical, ethical, legal, and the possibility of unintentional consequences.

We have revised our Fees in Therapy Online course.
It is offered for 6 CE Credits and Fulfills the Ethics/Law Requirement.


Points to Keep in Mind When Deciding Whether To Send An Account to Collections

  • The reason clients are in debt and unable to pay their therapy bills is quite relevant to whether hiring a collection agency is appropriate. If a client has lost their house, job or both, filing with a collection agency is probably not an effective, wise, caring action to take.
  • In most cases, the prudent approach for a client who already carries debt is to not let them accumulate more. If they fall behind, address it early and make adjustments if needed. Find an arrangement that will work for them and you and avoid becoming another part of their life they cannot keep up with.
  • Be thoughtful and engage the client in dialogue regarding appropriate fees that are within the client's means. If they cannot afford your full fee, consider different options, such as reduced fees or frequency of sessions, providing pro-bono therapy, devising appropriate, legal, and ethical bartering arrangements, negotiating a realistic payment plan, terminating treatment, and/or referring to a local low-cost mental health community clinic.
  • You can forgive some debt in order to allow a client to pay the remainder. But if you do so, be careful, as many insurance companies frown upon therapists' forgiving co-pay or deductibles. If the client is paying with insurance, forgiving debt may constitute fraud or violation of the contract.
  • If all other methods (reasonable fee, payment plan, bartering if appropriate, forgiveness of all or part of the debt) are not viable, you may choose to pursue outside options such as small claims court or a collection agency.¬†(These outside options are generally not recommended.)
  • Protect yourself: If you consider using small claims court or a collection agency to collect debt, include this information with your Office Policies forms at the outset of therapy and discuss it with the client.
  • Make sure that your clinical records reflect your thinking, discussions, and decisions regarding fees, forgiving debts, sliding scale arrangements, requests for payments, etc.

Our 60 Essential Clinical Forms includes Office Policies, Informed Consent, and much more.

The Record Keeping Online Course (6 CE Credits) includes 60 Essential Clinical Forms and fulfills Law/Ethics Requirement.

More Reasons NOT to Send an Account to Collections

  • You may only receive 10-30% of the fee owed. Ask yourself: Is this worth it?
  • Be aware that attempts to collect unpaid bills often lead¬†clients to file complaints with licensing boards. The charges in such filings do not center on the debt but on supposedly substandard care and/or harm caused by the therapists. Even unfounded and frivolous board complaints can result in therapists being investigated and, at times, sanctioned. Obviously, the stress of being investigated or taken to court is enormous, highly disruptive, and can last for years.
  • Be aware that all it can take is one bad review or other online reviews to badly damage your career.
More Relevant Online Courses


See our 6 CE credit online course: Fees In Psychotherapy and Counseling



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