Debt collection is the procedure of pursuing unpaid balances of loans or monies owed by individuals. An agency that practices debt collection is also called a debt collector or collection agency. Debt collection agencies buy outstanding debt obligations from debtors and then pursue with the creditors to recover outstanding balances through legal methods. This can be done either on a legal basis or on a contractual basis.

debt collection agency

Debt collection agencies buy outstanding unsecured debt from borrowers. The amount owed varies from case to case, depending on the debt and the amount of debt owed by the borrower. The agency then goes about trying to collect the debt from the borrower. The agency buys the debt from the creditors. The agency then tries to contact the individual or company that owes the debt. If a third party is involved it becomes the third party in a debt agreement.

Once an agreement has been made between the debt collection agency and the third party, an initial written debt agreement is sent to the debtor. The debt agreement states that the agency is not responsible for contacting or making contact with any third party unless legally permitted to do so in the contract. There is also a written notification sent to the original creditor that states the debt collection agency is working on collecting the debt. The original creditor also gets an invoice from the debt collection agency stating the exact amount of money due.

The debt collection agency then contacts the individual or company that owes the money to the original creditor. At this point the debt collector will make contact with the third party company or creditor. The goal is to get the company or creditor to act quickly to settle the debt owed. If the company or creditor does not settle the debt within a short period of time, the debt collector will be asked to return all the money owed. If the creditor still does not settle the debt, then the debt collector will be asked to file a complaint with the credit bureaus.

Collection agencies use multiple methods to collect monies from businesses and individuals. Some methods that are used include: telephone calls, bulk e-mails, and physical mail. Collection companies also use debt negotiation letters. These letters usually contain a demand for payment at the top of the letter. The next sentence states that unless the full amount of money is paid the debt collector will start legal proceedings.

Another method used by collection agencies to collect past due invoices is to use debt collectors on payday loans and cash advances. When a person has an emergency such as they are about to receive a wage cut or they need food because their car ran out of gasoline, they usually cannot wait until their next paycheck arrives to pay off their bills. To help these individuals and small business owners pay their bills quickly collection agencies will approach the financial institution that gave them the loan or advanced the money. The agency will negotiate a payment plan to pay the creditor.

If the credit card bill collector is able to settle the debt with the creditor then they can place a written agreement for repayment. This agreement will outline all of the fees, the debt collector will be paid, how long the settlement period will last and the amount of money owed. The debt collector will be paid the lump sum amount of money that the creditor owed. The written agreement will remain in the possession of the creditor and will serve as proof of the debt’s past due status. Once the agreement has been established between the debt collector and the creditor the money will be collected. If not then the collector may seek legal action against the offending party.

The credit card and loan collection agency may contact the individual that owes the debt and attempt to reach a settlement. If no agreement is reached within five days, the collector will have to provide the name of the law enforcement agency that has jurisdiction over the matter. The collection agency will have up to five days within which to file an official complaint with the local law enforcement agency. If no criminal offense has occurred within the five day period, the debt collection agency will have to return all of the monies that were owed. The amount of time within which a debt collection arbitration will take place can vary and may depend on the nature of the debt.