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 creditor, if you decide to hire an collection agency, you pass the obligation of collecting the debt to them. Normally, if the agency recovers the money they will only keep a percentage of the amount collected as payment.
Some agencies will buy the accounts but most will not. The debtor does not actually owe the collection agency any money but they still owe the debt to the original creditor. By law the collection agency must provide, if asked, proof of the debt (known as validation of debt) that they have been assigned the account for collections on behalf of the creditor.
Purchasing old debts is a big business. The collection agency is hoping that you would rather pay than get sued.
Every US based collection agency is subject to the F.D.C.P.A and is not permitted to collect on fraud accounts. They will take every legal remedy available to enforce the collection of accounts that are outstanding. This includes going to court.
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 attempt to collect via a 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 defense the amount owed is disputed there is an unrelated adverse claim 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. - 16089
As a creditor, if you decide to hire an collection agency, you pass the obligation of collecting the debt to them. Normally, if the agency recovers the money they will only keep a percentage of the amount collected as payment.
Some agencies will buy the accounts but most will not. The debtor does not actually owe the collection agency any money but they still owe the debt to the original creditor. By law the collection agency must provide, if asked, proof of the debt (known as validation of debt) that they have been assigned the account for collections on behalf of the creditor.
Purchasing old debts is a big business. The collection agency is hoping that you would rather pay than get sued.
Every US based collection agency is subject to the F.D.C.P.A and is not permitted to collect on fraud accounts. They will take every legal remedy available to enforce the collection of accounts that are outstanding. This includes going to court.
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 attempt to collect via a 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 defense the amount owed is disputed there is an unrelated adverse claim 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. - 16089
