There are many types of debt collection agencies. It is important to understand how each one functions in order to select the best collection process for you. Delinquent debtors are guaranteed to meet a debt collecting agency in order to collect their debts. Whether it’s the collection department or a third-party agency, a collection agency processes the debt situation. They are responsible for checking the debt records, which includes the debt to be paid, as well as the interest (if there is any) and the deadlines for these debts. Truly, the debt collecting agency makes it easier to collect debts in behalf of the company that the debtor owes from. visit
There are three most common types of agencies. The first debt collecting agency is called the first party agency and is a department or subsidiary of the company which the debtor owns from. Because it is the first party, the debtor connects directly to the creditor. This type of agency is usually compelled to create better customer relations since they represent the lending company.
The second type of debt collecting agency is the third party agency. The third party agency collects in behalf of the creditor. Some companies opt to get a third party agency because they seem to have more expertise in collecting from debtors. This might make the job easier. However, a percentage of the debt will be acquired by the third party agency according to an approved contract – sort of like a collection fee or an incentive for successfully accumulating the debt payments. Some debtors are wary of third party agencies though, since this type of agency is more prone to scamming and theft.
The last type of debt collecting agency is the debt buyers. Debt buyers are individuals or organizations who purchase the debt amount from the creditor. They may choose to pay the debt in full or partiality. Afterwards, they would collect the debt from the debtor, usually with interest. This might be an advantage for the debtor, especially if the debt buyer offers a lower interest rate over a period of time. By choosing to pay the creditor and looking to the debt buyer, the debtor may save himself from being buried in high interest rates. Each country has a different policy about debt collection. It is important to fully weigh the pros and cons of the different agencies available before settling on one.