All You Need to Know About Debt Collection Services

Are you worried because you don't have enough money to clear your bills and anticipating a call from a debt collector? If it's for the first time, you must be having a lot of fear and concern about the process. You have landed on the right place to have the basic knowledge about debt collection services.  You will learn about their perspectives and motives, and interact with them less stressfully. But before you move on to the process, it's important to know the time period, after which you will be contacted by such professionals.

Delinquent debt

When the time of the due date of debt payment passed at least 60 days, the payable is considered as delinquent debt. It can be of any type; medical debt, automobile loan, credit card debt, personal loan, student loan, business debt, payday loan debt and unpaid bills.

Debt Collection Services

Most debt collectors work for agencies while some of them work independently. The majority of the time, they offer debt recovery services to original creditors, remitting delinquent debts. In return, they're paid with 25 to 40 percent of the recovered debt. So, they earn more if they recover more.

Agencies collecting debts have different expertise based on the debt-type. They tend to take the recovery job on two conditions and set their rates accordingly.

·         The debt limit must be more than the least specified amount

·         The debt must be of reasonable age (more than 60 days and less than 2 years)

Reputable debt collection services follow state and federal laws very strictly.

If the debts are high in value and the consumer is in no capacity to repay the whole amount, these agencies settle for less amount, helping both; the consumer and the principal creditor. If the consumer strictly denies to clear his dues, they may file a lawsuit to collect the dues.

The Process

There are different ways to collect debts.

·         With the help of contact information given by original creditors, debt recovery agents try to reach delinquent borrowers through phone, emails and postal mails, convincing them to repay their dues.

·         In the case of failure to contact, they search for borrowers' information via private investigators and computer software. They look for bank accounts, brokerage accounts and other assets of debtors, and determine their ability to clear their dues. 

·         In order to force the debtors to clear their delinquent debts, these agencies may inform credit bureaus of their unpaid dues which would affect their credit scores.

Debt collectors are also hired to recover dues from those debtors who have received court's judgment to repay their debts, but they have failed to comply. In this situation, debt collection service may perform any or all of the following:

·         Impose levies on motor vehicles or bank accounts

·         Place lien on their respective properties

·         Force them to sell their assets  

What You Should Do?

Avoiding paying the delinquent debt will always impact your credit scores negatively. If you're the one dealing with debt collectors, there's no need to run away from them. They are professional enough to provide you a feasible solution to repay your old dues and improve your credit scores. Therefore, it is advisable to negotiate with them and settle for a reasonable debt repayment.