Debt collection agencies are hired on behalf of creditors to collect money when the creditors don't have the time or resources to effect collections on overdue debts for themselves. Collection agencies specialize in getting people to pay, they have staff that specializes in debt collection and skip-tracing, which covers a broad range of FDCPA legal and debt negotiating skills, and a streamlined process for going after accounts.
As a company that is owed money you can hire a collection agency. They get assigned the task of collecting the account. Most agencies, when successful will take a small portion of the collected amount. Be careful of firms that want money upfront.
Most collection agencies do not buy the debt outright. The debtor does not actually owe the agency the money. It still owes the debt to the original creditor. The collection agency will provide, if asked, proof (known as validation of debt) that they have been placed into collections on behalf of a creditor.
Purchasing old debts is a big business. The collection agency is hoping that you would rather pay than get sued.
All collection agencies are governed by federal laws and no collection agency is, or wishes to be in, the business of collecting fraudulent debts. However, when acting on behalf of a legitimate creditor they will take all legal steps to enforce the collection of badly overdue accounts, if necessary going to court on behalf of the creditor.
This is when you hire a debt collection agency -
you know the debtor has the ability to pay the debt is due there are no announced reasons for not paying
A debt collection company will approach the situation through a multi-stage letter writing campaign which can be effective, if occasionally slow, but it may not lead to recovery when -
the debtor has or thinks he or she has a valid excuse the amount past due is disputed there is an unrelated claim against you the debtor's solvency is in doubt or there is the possibility of bankruptcy there is security to recover or a possible prejudgment remedy
If any of these issues occur, the creditor should control all pertinent legal decisions such as if and when to file suit, what attorney to use and any other decisions made prior to or during the court action. This is crucial when the creditor has a long term interest in keeping the customer as his client. Not retaining control of such decisions and proceeding without the advice of a qualified legal representative could leave the creditor open to counter suit.
When the creditor does not wish to do additional business with the client and the creditor is not interested in the outcome of a debt collection, beyond getting his money back, they can sell the debt to a debt buyer. - 15432
As a company that is owed money you can hire a collection agency. They get assigned the task of collecting the account. Most agencies, when successful will take a small portion of the collected amount. Be careful of firms that want money upfront.
Most collection agencies do not buy the debt outright. The debtor does not actually owe the agency the money. It still owes the debt to the original creditor. The collection agency will provide, if asked, proof (known as validation of debt) that they have been placed into collections on behalf of a creditor.
Purchasing old debts is a big business. The collection agency is hoping that you would rather pay than get sued.
All collection agencies are governed by federal laws and no collection agency is, or wishes to be in, the business of collecting fraudulent debts. However, when acting on behalf of a legitimate creditor they will take all legal steps to enforce the collection of badly overdue accounts, if necessary going to court on behalf of the creditor.
This is when you hire a debt collection agency -
you know the debtor has the ability to pay the debt is due there are no announced reasons for not paying
A debt collection company will approach the situation through a multi-stage letter writing campaign which can be effective, if occasionally slow, but it may not lead to recovery when -
the debtor has or thinks he or she has a valid excuse the amount past due is disputed there is an unrelated claim against you the debtor's solvency is in doubt or there is the possibility of bankruptcy there is security to recover or a possible prejudgment remedy
If any of these issues occur, the creditor should control all pertinent legal decisions such as if and when to file suit, what attorney to use and any other decisions made prior to or during the court action. This is crucial when the creditor has a long term interest in keeping the customer as his client. Not retaining control of such decisions and proceeding without the advice of a qualified legal representative could leave the creditor open to counter suit.
When the creditor does not wish to do additional business with the client and the creditor is not interested in the outcome of a debt collection, beyond getting his money back, they can sell the debt to a debt buyer. - 15432
