Louisiana Establishes Debt Recovery Office

Louisiana expects to realize as much as $200 million over the next five years from a new Office of Debt Recovery authorized by the 2013 Legislature.

The office established by House Bill 629 could generate up to $30 million in fiscal 2014, said bill sponsor Rep. Chris Broadwater, R-Hammond.

State agencies must report any uncollected debts that are at least 60 days old to the new office or to the attorney general's office. The attorney general currently collects delinquent debts for 24 of the 174 state agencies or offices.

All state agencies and departments are required to report information about receivables on a quarterly basis.

Louisiana currently has $1.6 billion in outstanding receivables, Treasurer John Kennedy said, including $690 million of that amount is 180 days past due.

"No business in the real world would go about its operations without checking accounts receivable every week," he said. Many of the state's budget problems could be solved with the timely collection of its debts, Kennedy said. "California brought in $2 billion by improving its debt collection practices," said Kennedy.  "If we could improve our collections by just 10%, think of what it could do for our budget."

The first $5 million of annual collections by the office in the first five years is dedicated to Louisiana State Police for new trooper training.

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