Debit Collection is a genuine and lawful business. If an individual is contacted by a representative of any such agency, it does not necessarily mark the commencement of harassment or an offensive relationship. They are more than willing to work in close tandem with the debtor to help him work out a plan that will enable him to pay of his loans in the most convenient and easily accessible manner. They will provide several options to the debtor that may include full payment, monthly instalments or even an abridged settlement.
All you need to know about private debt collection
As a business owner or firm you have to manage a lot of things and going after clients for unpaid invoices is a hectic chore that is time consuming. And despite your efforts you can never be certain that the debt will be cleared. Private debt collection firms are now emerging where they solve the major debt collecting issue by acting out for your firm or organization. Insurance firms, law firms, finance companies, internet based companies; medical organizations, etc are some of the firms that require such debt collecting services from time to time.
Overdue payments, unpaid accounts, arrears in rent are some of the problems that you may face as a business owner or company. You cannot devote all your time in recovering unpaid invoices and debts.
Social stigma attached to debt collection agencies has lent them a very bad reputation in the market. Consumers not only dislike them, but they also greatly fear them. This fear arises largely out of the fear of harassment that the debtor may or may not be subject to by the hands of the debt collecting agency. Often consumers may also have to complaint to the governing bodies regarding the trouble they may be facing from collection agents. But in today’s day and age, debt collection agencies ensure not to infringe consumer protection laws.
A good debt collection agency is one that is able enough to become the perfect bridge between the creditor and the debtor. They work towards the betterment of both the parties such that a win – win situation is created for the two. Let us now, understand a credit report.
What comprises a Credit Report?
The credit bureau prepares the credit report. It may be defined as a comprehensive report of an individual’s credit history. It is used by a lender to determine a loan applicant’s credit worthiness.
Some of the information that a credit report may include would be:
1) The individual’s personal data. This would include, office and residential address, contact numbers, past and present employment history and details of government documents.
2) Summary of credit history. This would include information regarding the number of and the type of accounts that are past due or enjoy a good social standing.
3) Detailed account information.
4) The credit report also includes information about any other accounts that have been turned over to the collection agency as a result of being overdue.
Trustworthy debt collectors will make an effort to get hold of accurate and comprehensive records, so that they do not erroneously pursue persons who do not actually owe money. In case a fraud has been committed where in it is a case of identity fraud (an individual being held responsible for someone else is negligence in paying up outstanding) an honest and genuine debt collection agency will make all attempt to accurately verify the individual’s claims regarding identity fraud. They will try not to sue the individual for out of order of limitations debts. Harassment or ill treatment will not be meted out on account of discrimination made on the grounds of age, sex, social background, race and other such features. They will not deliberately broadcast any debt that the individual owes the creditor or aim to mislead the debtor in lieu to collection of the debt. They will also not act as if to be representatives of any law enforcement agencies and threaten the debtor with arrest. Debt collection agencies that operate on honest grounds, usually do not attempt to contact the defaulting party before 8.00am and after 9.00pm. These are certain ethical rules that a good private debt collection agency will try to follow as closely as possible.
How does the System of Debit collection Work?
In certain cases, debt collectors also deal with accounts that already have a court case registered against them and a judgement has also been passed wherein the court has passed orders to the debtor to pay certain amount of the outstanding. When the creditor has won the judgement, it may be tricky to collect the amount. In such cases, creditors have the option of hiring debt collection professionals towards this job, which include but is not limited to placing levies on motor vehicles or bank accounts or force the sale of property or an asset. Debt collection professionals can also resort to other means of retrieving the money such as garnishing wages or placing a lien on property.
Garnishing wages - Garnishing involves a legal process whereby the outstanding amount owed by a debtor to the creditor, is transferred onto and paid by a third party who in turn hold money or property that is due to the original debtor. For example, Mr. A owes money to Mr B which Mr B is unable to recover from Mr A. However Mr. C owes money to Mr A. Mr A can transfer the outstanding amount that he owes to Mr B onto Mr C. Mr C now becomes the third party and will now be liable to pay the debt amount that was due to Mr B.
Placing alien - This refers to the legal rights of a creditor. If the debtor has failed to fulfil the loan contract obligations, then the creditor is legally entailed to sell the collateral property of debtor. For example, when an individual takes out an automobile loan from the bank, the bank becomes the lien holder bank and the lien is released when the entire amount is paid in full. If the outstanding is not cleared within the specified time limit, the lien holder has the authority to auction off the property or asset.
