Collection Agencies: What Do They Do?

Collection agencies are businesses that collect past-due bills and accounts receivable for other persons or businesses in exchange for a fee. Collection agencies charge for their services one of three ways:

1) A flat fee.

2) A percentage of what is collected.

3) Through a direct sale of the delinquent accounts.

If you are trying to collect a small or medium sized debt, using collection agencies that charge a flat fee are probably your best option - collection agencies that charge a flat fee work just as hard to collect a small debt as they do to collect a large debt.

If you have just a few large unpaid receivables, working with collection agencies that charge a percent of the total debt collected is a wise choice. (usually 25 to 50 percent).

The third option, selling your uncollected receivables at a discount to certain collection agencies is advisable only if you have a very large amount of debt - usually $1 million or more. The selling price is typically a minuscule 2 to 8 cents on the dollar.

Most collection agencies use one of three tactics to collect debt:

1) Letters.

2) Direct contact via the telephone.

3) Litigation.

Typically, collection agencies begin the collection process by sending a series of notification letters, often called demand letters. The final notification letter generally warns the debt dodger that if the past-due account is not paid by a certain date, his or her name or company will passed on to more intensive collections.

Many collection agencies also pay their staff to phone the debtor directly. This direct contact is most useful in turning up the heat on debtors who have identified themselves as having no intention to pay their bill.

Litigation - in small claims court or a full-scale courtroom - is a final option.

Besides sending out letters and making phone calls, some collection agencies also specialize in locating debtors who can no longer be reached at the address or phone number listed on their accounts. To determine whether certain collection agencies offer this service, ask them about their "skip tracing" abilities.

Collection Agency Outsourcing - Outsourcing accounts receivable to a professional collection agency has become a popular alternative to attempting to collect receivables in-house.

---

Credit Card Rates - Negotiating Rates with Your Credit Card Company

Ok, let's face it, everybody hates high credit card rates,... Read More

3 Ways to Improve Your Credit Score by 50 Points In Less Than 30 Days

In Less Than 30 Days. "What can you do to... Read More

What Can Happen to You as a Victim of Identity Theft, Facts & Figure

Is identity theft really that serious? Thousands of people every... Read More

What Are The Most Common Credit Card Mistakes?

Now in a world with so many easy to get... Read More

Credit Report ? How Your Credit Score is Determined

Most consumers are aware that they have something known as... Read More

Student Credit Cards 101

If you're a college student, you probably already have a... Read More

What Does Your Credit Score Tell You?

When you apply for a loan or a mortgage, the... Read More

Your Consumer Rights

If you have ever fallen behind on your debts you... Read More

Some Truth About Credit

Credit is currently and has been historically an integral component... Read More

Finding Reputable Credit Card Companies

You're interested in getting the best credit cards for your... Read More

5 Things Your Credit Card Company Keeps Quiet About

Credit Cards can bankrupt you if you let them run... Read More

Credit Cards: How To Use Them

Credit cards can be a very quick way of getting... Read More

Credit and Loan Help for Mortgage Loans

Mortgage loans are some of the most difficult loans to... Read More

Credit Counseling: Could it Work for Me?

In the face of financial hardship, many seeking a responsible... Read More

Get Your Credit Score To Soar In The Twinkling of An Eye

Ever wonder how a creditor decides whether to grant you... Read More

Balance Transfers Can Help You Stop Putting Money Down The Drain!

As you probably know, interest rates are at all time... Read More

Different Ways to Borrow Money

There are many different ways to borrow money. Outlined below... Read More

Five Debt Negotiation Facts

These five debt negotiation facts along with a few debt... Read More

Do You Want to Get a New Credit Card at a Great Rate?

1) Do your homework. Applying for and getting approved for... Read More

First Major Regulatory and Legislative Victory of 2005 for Creditors and Consumers

Under the Fair Debt Collection Practices Act, collectors are not... Read More

Choosing The Best Credit Card To Apply For

Always shop around to get the best deal when choosing... Read More

All You Wanted to Know of Bad Credit

Martin Henderson is in a fix these days. Because of... Read More

A Cure for an Ailing Credit

Credit has become a much-used word, thanks to the various... Read More

7 Ways To Squash Identity Theft

It is the scourge of our age: identity theft. Thieves... Read More

How To Avoid Becoming A Victim of Identity Theft

With identity theft statistics currently at an all time high,... Read More

Minimize your Risk for Identity Theft

Identity theft is the fastest growing crime in America. According... Read More

How Can A Qualified Mortgage Consultant Help Boost Your Credit Scores?

Consumers interested in purchasing or refinancing a home will pay... Read More

Identity Theft ? How Can You Prevent It Happening to You?

The nightmare of identity theft strikes an estimated 750,000 people... Read More

Bad Credit Credit Cards

Chances are you've gotten your share of offers like this... Read More

Borrowing on a Credit Card

One of the easiest ways to borrow money of a... Read More

Tackling Bad Credit

The first time I heard the term credit history was... Read More

The Credit Card Surprise That You Need to Look Out For

Companies that issue credit cards want to make a profit.... Read More

Are You The Only One Using Your Name?

Identity theft has become an epidemic. Millions and millions of... Read More