Debt collection agencies are used by creditors that needs to collect money when the they don't have the time, resources or patience to effect collections on their own. Collection agencies are experts in getting people to resolve money issues, they have trained staff that specializes in debt negotiation and skip-tracing. This training covers a broad range of FDCPA, legal and debt collecting skills as well as a proven 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.
Occasionally, collection agencies will purchase the debt from the creditor. However, usually all that the collection agencies acquire is the right to carry out the process of debt collection.
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 -
the debtor has the ability to pay but ignores you the debt is past due there is not a valid dispute
A debt collection agency will approach the issue through a multi-stage writing campaign which can be effective, if occasionally slow, but it may not lead to recovery when -
the debtor has or thinks he/she has a valid defense the amount owed is disputed in full there is faulty product the debtor's solvency is in doubt or there is the possibility of bankruptcy
If any of these issues occur, the creditor should for their own legal protection retain control of important decisions such as if and when to litigate, what attorney to use and any other decisions made prior to or during suit. This is very important where 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 attorney 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. - 16036
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.
Occasionally, collection agencies will purchase the debt from the creditor. However, usually all that the collection agencies acquire is the right to carry out the process of debt collection.
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 -
the debtor has the ability to pay but ignores you the debt is past due there is not a valid dispute
A debt collection agency will approach the issue through a multi-stage writing campaign which can be effective, if occasionally slow, but it may not lead to recovery when -
the debtor has or thinks he/she has a valid defense the amount owed is disputed in full there is faulty product the debtor's solvency is in doubt or there is the possibility of bankruptcy
If any of these issues occur, the creditor should for their own legal protection retain control of important decisions such as if and when to litigate, what attorney to use and any other decisions made prior to or during suit. This is very important where 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 attorney 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. - 16036
