Debt Collection Everything You Need to Know 33882 - Debt Collection: Everything You Need to Know

Debt Collection: Everything You Need to Know

A debt collection agency is a type of third-party agency that collects debts for a creditor or a government agency. Debt collection agencies can pursue the debtor for payment in person, by mail, telephone, and or legal action if necessary.

Debt collection agencies (also known as collection agencies, or simply collection agents) are businesses that collect unpaid debt on behalf of original lenders. Debt collectors purchase debt from the lenders at pennies on the dollar and then try to recover the full amount from debtors.

Debt Collection Vs Personal Debt Collection

Debt collection is the process or act by which a creditor (person or organization to whom money is owed) seeks payment from the debtor; the act of seeking payment by a creditor of a debtor’s outstanding debts.

Personal debt collection is done by collecting agency/company, whereas commercial debt collection is done by a company/agency that hires someone to recover the money due from the debtor.

So, we can say that personal debt collection means when an individual tries to collect his own debts (in-house), and commercial debt collection means when an agency/company tries to collect their client’s debts.

Are Debt Collection Practices Legal?

People who deal with debt collection agencies must follow the Fair Debt Collection Practices Act. One way they can be in violation is by harassing you. They cannot call you repeatedly, and they cannot call you before 8 a.m. or after 9 p.m. They also have to stop calling you if you ask them to.

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Telling lies about your debt is another illegal practice for debt collectors. They are not allowed to falsify documents, create fake letters from law firms, or say that you will be arrested if you don’t pay your debt.

Is Hiring A Debt Collection Agency Necessary?

Most people do not understand the importance of debt collection. In most cases, they prefer to avoid it. They think that by ignoring a debt, it will just go away. This is not true at all. You may have already experienced this if you have ever had a debt collector call you and harass you to pay your debts.

If you have been having problems with paying back your debts, then the decision to hire a debt collection agency is the best thing that you can do. These agencies are more efficient than hiring an individual because they can help you collect more money than an individual collector could. With their help, your debts will be paid off in no time at all.

Things To Consider When Hiring A Debt Collector

If you have a debt that has gone into collections, you are probably wondering how to hire a debt collector. It is okay to be concerned about hiring a debt collector. However, there are some things that you should consider when hiring a debt collector. Here are five things to consider when hiring a debt collector.

  1. Is It Legal?
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If the person or company that is trying to collect money from you is not licensed and not legal, then they cannot take any legal action against you. The debt collector cannot take any of your personal property without first getting a court order signed by a judge.

  1. Is It Ethical?

If the debt collector seems unethical in any way, ask them if they are willing to provide references and contact information for past customers. If they refuse, this should be a red flag that they may not be ethical at all and could make up false information about you in order to get money out of you.

  1. Are They Using Intimidation Tactics?

A lot of times, unscrupulous collectors will use intimidation tactics on people who owe money to try and get them to pay off their debts as quickly as possible. You do not have to deal with a person or company that does not use any tactics.

  1. Reputation

The reputation of a debt collection agency is paramount. A large number of complaints against a particular agency may be reason enough not to hire them. The Better Business Bureau, the Federal Trade Commission, and the Consumer Financial Protection Bureau are all good places to check out an agency’s reputation.

  1. The Amount of Experience
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A good debt collection agency has been around for at least a few years and has plenty of experience dealing with different types of businesses and individuals. There are some agencies that deal only with medical debts, while others only deal with credit card debts.

  1. The Average Debt Collection Results

Different agencies have different average results in terms of collecting money owed. This information can be found on the agencies’ websites or through research online or through third-party organizations.

Hidden Benefits of Debt Collection Agencies         

Debt collection is a necessary part of running a successful business. While we all know that there are certain benefits to using debt collection agencies, many of us overlook the benefits and instead focus on the negatives. If you’re not convinced, here are eight hidden benefits of using a debt collection agency.

Subject Matter Experts

Debt collection agencies have trained professionals on staff. These individuals have extensive knowledge and experience in collecting debts. They will be able to collect your money quicker than you would on your own.

Productivity

If your company has fallen behind on its payments, chances are that it’s having an adverse effect on your productivity. Debt collection agencies can help get your company back on track by collecting overdue invoices and getting your cash flow moving again.

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Protecting Your Business

If customers are owed money by your business, there’s always the risk that they could take further steps to get the money that is owed to them. By referring the matter to a debt collection agency, you can ensure that your client’s interests are looked after and that they won’t be taken advantage of in any way.

For Your Business

You can focus on other aspects of your business knowing that you have an expert handling the debt collection process. Digital marketing Knutsford is vital for any business looking for a strong and effective online presence. The Internet and related technologies are growing at an unprecedented rate, with new developments and innovations appearing every day.

Common Myths about Debt Collection Agencies

There are numerous myths about debt collection agencies. These myths are perpetuated by the media, scare tactics, and ignorance. Let’s take a look at some common myths and facts about debt collection agencies.

  1. Myth: Debt Collection Agencies can do anything they want to collect the debt owed to them

Truth: Debt collection agencies cannot harass you in any way; they cannot call your friends, neighbors, or employer.

  1. Myth: You Should Never Talk To A Debt Collector

Truth: It is always better to try and work out a payment plan with a debt collector than ignore them altogether. If you ignore them then they have the right to bring legal action against you for the balance owed on the account.

  1. Myth: Once A Debt Is Written Off You Will Never Be Billed Again
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Truth: Once a debt is written off by the original creditor it is sold on to another company who can then try and collect that money from you again in whatever manner they see.