Debt collection agencies are frequently employed by debt collection agencies, while others work on their own. Several of these people are also legal professionals. Customers with delinquent debts (payments that are at least 60 days past due) may use these companies as a middleman to collect and remit their debts to their original creditors. The process of collecting debts owed by individuals or companies is known as debt collection agency.
A debt collection agency or debt collector is a business that specialises in debt collecting. As long as there have been debts, debt collection has existed. In fact, it predates the invention of money, having existed in trading systems. Debt collection has a long history, dating all the way back to Sumerian times about 3000 BC.
Methods of Debt Collection by Collection Agencies
The sorts of debt that debt collection agencies collect tend to be specialised. For example, a collection agency may only pursue accounts that are only a year or two overdues. The activity of a reputable firm will also be limited to debt collection within the state’s statute of limitations. If the obligation is within the statute of limitations, the creditor has the right to pursue it legally even though the debt is long past due.
The collector receives a percentage of the money they collect from the creditor, usually between 25% and 50%. Debt collection firms collect a wide range of outstanding obligations, including credit cards, medical bills, automotive loans, personal loans, business loans, and student loans.
Some collection firms also bargain with customers for less than the amount owed for difficult-to-collect debts. Collection agencies may submit cases to attorneys who may sue customers who refuse to pay up.
How to hire business debt collection agency?
Start the collection process immediately by getting a free collection quotation or submitting your account online for evaluation. You can also reach out to us to learn more about our business debt collection agency services and how we can help. Whether you’ve worked with a debt collection agency before or not, we serve as an extension of your company.
If you have experience in the debt collecting industry, we can customise our services to meet your specific requirements. While no two cases are alike, we can guarantee that we’ll invest in the time, effort, and resources necessary to recover the money you’re owed so you don’t have to.
Tips for Collecting Unpaid Debt for Small Business:
- Collect as much information as possible on the debtor (ex. contact information, the original agreement, etc).
- If you can avoid it, work with a collecting agency as soon as possible.
- You should look for a collection agency that is eager to work with you and take care of your company’s unique needs and circumstances.
- You get what you pay for; while our percentage rates are high, our success rates show that our services are well worth the money we charge.
Regulations on the collection of debt
For personal debts, the Fair Debt Collection Practices Act (FDCPA) regulates debt collectors at the federal level. The FDCPA, on the other hand, has no provisions for the collection of commercial debts. Debt collectors aren’t restricted in their ability to recover a debt owed by a business if your customers are corporations. Using illegal tactics like threats and fraud is not an option. A collection agency for businesses will work in compliance with all applicable laws and regulations.