Dealing with Collection Agencies

December 29th, 2006

As well as creditors or debt collectors, you may be dealing with Collection Agencies. If you find yourself dealing with Collection Agencies, don’t panic. On this Credit Repair Help website, you will learn all about dealing with Collection Agencies. The federal government and your state provide you with many rights when dealing with Collection Agencies.

Who are Collection Agencies, really?

To learn the ins and outs of dealing with Collection Agencies, you should first know that Collection Agencies are businesses that earn money by collection debts.

How do Collection Agencies get paid?

Collection Agencies get paid by either:

the creditor forwards your debt account to the collection agency and agrees to pay the collection agency a percentage of the amount collected, or
the creditor sells the right to collect on your debt to the collection agency and the collection agency keeps 100% of whatever they can collect from you

Who are collection agents or debt collectors and how do they get paid?

Sometimes you are not dealing with Collection Agencies but you are dealing with collection agencies’ agents or their debt collectors instead. These collection agents work for collection agencies and earn commission on collection debt from you. Collection agents are paid a percentage of the debt they collect. That means they will do almost anything to collect debt from you and sometimes they even violate your debt collection rights and break laws set forth by the Federal Fair Debt Collection Practices Act. So, make sure you know your rights in dealing with debt collection agencies or their debt collector agents.

A man dealing with debt collection agency

Debt collector from debt collection agency eager to make money off of the debtor using any means possible.

Why do collection agencies have bad reputation?

The pay structure of collection agencies and debt collectors motivate them to go above and beyond to collect debt from you. When dealing with collection agencies, don’t be surprise if they would do anything to collect from you including bother you to no end at work, at home, and at any other places they can. If you find yourself dealing with collection agencies, bear in mind that there are many things they cannot do and if they appear too pushy, the chances are they may be breaking some laws and you could use that to your advantage.

Should I trust a friendly collection agency or collection agent?

No. Remember, when dealing with collection agencies, that they are in business to collect from you. They only get paid when they are successful at collecting from you. Sometimes, in order to get you to pay as much as possible and as fast as possible, the collection agency or debt collector may appear friendly and on your side. Don’t believe what you see or hear – look at the numbers, know your debt collection rights and don’t let the collection agency or debt collector talk you into paying more than you can. No matter what the collection agency or debt collector say, they are not on your side. Once you know the basics of dealing with collection agencies, you should learn How to deal with Debt Collectors because you may find yourself dealing with debt collectors more often than dealing with actual collection agencies.

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