There will be times wherein you have to take a debt. It may be for emergency, but you will obviously need to pay up right after! If not, then there will be a debt collection agency that will visit you or contact you for a reminder. But what exactly does a debt collection agency do, and what is the process? In this article, we show you all about the debt collection agency.
What is a Debt Collection Agency?
Like the name states, this is a company that helps collect debt from those who owe it. They are usually asked for when they are 60 days past the due date. The agency would consist of debt collectors, sometimes attorneys, who would contact those in debt to notify them of the payment due. Once fully paid, the creditor would pay the collector 25-45% of what was paid, depending on the debt collector’s rates. Basically, the more money a debt collector recovers, the more they would earn. While agencies provide debt collection for all kinds of debt, some specialize in certain areas, such as collecting debt for personal reasons or those borrowed from banks. They may also advise creditors to go through settlements and hire reputable lawyers to take action for those hard-to-collect debts.
Some agencies even buy debt, for a much lower price than what is owed by the debtor. There are debt buyers who go through a bidding process, depending on the amount and type of debt that is being sold.
If you are one in debt and expect to be notified, then don’t be afraid (Unless you are planning to run!). These debt collectors will simply contact you, reminding you of your debt. As lons as you comply with what they say, and pay up, then you won’t have any trouble.