Heard about someone receiving a call from a Debt Collection Agency and you are curious to know about the scary-sounding name? As to what it has to show to you? Below are a few of the main terms which will help you clear your doubts briefly and make you understand what a Debt Collection Agency is:
Concept of ‘Debt Collection Agency’:
A Debt collection agency is a firm containing Debt Collectors, who help fellow creditors get their money back from debtors. They work as a third party in these cases when a creditor is sure Debtors have no intention of giving payments. Few Debt Collectors work unassisted while few are lawyers in regional lawsuits, but mostly you will find Money collecting agencies earning money through this business.
Debt Collection Agency is a famous term now In demand, these past few years has boosted their name and fame In the society as nowadays people tend to approach them when they are sure there’s no way they can deal with the matter on their own.
The primary reason why this industry is now notable is that they promise you a timespan in which they will carry your money back and to the customer’s surprise, they do get the money back within the mentioned time.
As a token of appreciation, Creditors who get their money back or at least a bit of it pays 25-50% of their share to the Agency in the form of fees or commission. Debt collection agencies collect debts such as Automobile loans, credit cards, cell phone bills, student loans, medical, personal loans and as well as business debts.
Work of Debt Collectors:
Debt collectors do their job by reaching the debtors through Emails, Messages or calls, trying to convince them to pay the overdue debt as soon as possible. As these collectors have full authority from creditors, if debtors don’t respond to them or keep on avoiding them, then they start doing the job in their manner. Collectors perform secret searches and investigations on the debtor, trying to figure out his bank balance and all the related and important information. They look further into Debtor’s personal financial space without hinting to the said man, to find out his capability of paying.
Even though they are provided with brief information, debt collectors are still dependent on debtors to pay the amount with ease from their side. Debt collectors are not permitted to access the debtor’s account or the same in any case except when any jurisdiction judgement is involved.
The last option for a Creditor is to sell their debt to a debt buyer when they are Guaranteed that debtors are not going to pay the money back. In this case, Creditors can sell the debts to a debt-buying firm for some bucks or dollars and can erase the tag of ‘Creditor’ from their name. They can step aside and carry on with their other business as the responsibility of collecting the debt and managing the case will arrive into the hands of the debt buyer completely.
In the current case, debt buyers have some privileges that are listed below,
- They can select an account that is an old one and hasn’t received a single penny from the debtor.
- They have an option where they can select an account that has 0 third party involvement.
- They can choose an account that falls somewhere in the middle of the above.
Debt buyers have their ways to collect the money from the debtor, they can keep all the received money to themselves as they are the real creditors now. The more money they get from the debtors, the more amount gets added to their total profit.