Collection agencies
A collection agency can be defined as an organization that follows up on unpaid debts from borrowers. They make their money from percentages and commissions charged on the amount collected from the borrower. In short, they are employed by creditors as agents who are responsible for collecting the debts on their behalf.
Having extensive knowledge on collections agencies can help you have an idea of how they operate. The information acquired on how collection agencies work is very vital. It'll actually give a person the necessary armor to protect themselves from any harassment. For starters, you can learn about the different types of collection agencies. There are two main types namely.
First party agencies: they are often a branch or department of the lenders. They are assigned the task of collecting the debts by the management of the company or organization. They are less aggressive since they want to maintain a good relationship with the customer.
Third party agencies: they are an outsourced party and are usually hired by the lender. They are more ruthless since they want to show their effectiveness to their client.
Laws governing collection agencies
The main objective of the collection agency is to recover the money that you borrowed. Fortunately, there are some rules and regulations that have to be followed irrespective of the amount owed or the duration that has passed after the due date. The first step taken by most of these agencies is to inform you of your outstanding debts. They'll then politely request you through phone calls, emails and visits to repay the debt.
You can come to an agreement on how to pay the amount in case you don't have the ability to pay lump sum. The one thing you shouldn't do is resist their attempts to acquire their money from you. This often gets you on their bad side and that's why they'll have no other option but to take drastic measures.
How collection agencies work
Failing to pay up means that you've allowed the collection agency to go ahead and act accordingly. They will start by taking you to court. This is the legal and only means that they are allowed to use in order to acquire the funds. You'll be served with a demand letter that informs and notifies you of the debt and its urgency. This is a very fair way since you are always allowed to give your part of the story to a judge as to why you aren't paying your debts.
The collection agency has no authority to seize any of your property, including your car without going to court first. The only scenario where your car can be seized is if you issued it as security to the loan that you took. Your car is otherwise safe and can't be touched by the collection agency. You have the right to forward any complaints to consumer protection if you are being aggrieved by the collection agency. You are still entitled to all your rights despite the fact that you owe your lender money.
A collection agency can be defined as an organization that follows up on unpaid debts from borrowers. They make their money from percentages and commissions charged on the amount collected from the borrower. In short, they are employed by creditors as agents who are responsible for collecting the debts on their behalf.
Having extensive knowledge on collections agencies can help you have an idea of how they operate. The information acquired on how collection agencies work is very vital. It'll actually give a person the necessary armor to protect themselves from any harassment. For starters, you can learn about the different types of collection agencies. There are two main types namely.
First party agencies: they are often a branch or department of the lenders. They are assigned the task of collecting the debts by the management of the company or organization. They are less aggressive since they want to maintain a good relationship with the customer.
Third party agencies: they are an outsourced party and are usually hired by the lender. They are more ruthless since they want to show their effectiveness to their client.
Laws governing collection agencies
The main objective of the collection agency is to recover the money that you borrowed. Fortunately, there are some rules and regulations that have to be followed irrespective of the amount owed or the duration that has passed after the due date. The first step taken by most of these agencies is to inform you of your outstanding debts. They'll then politely request you through phone calls, emails and visits to repay the debt.
You can come to an agreement on how to pay the amount in case you don't have the ability to pay lump sum. The one thing you shouldn't do is resist their attempts to acquire their money from you. This often gets you on their bad side and that's why they'll have no other option but to take drastic measures.
How collection agencies work
Failing to pay up means that you've allowed the collection agency to go ahead and act accordingly. They will start by taking you to court. This is the legal and only means that they are allowed to use in order to acquire the funds. You'll be served with a demand letter that informs and notifies you of the debt and its urgency. This is a very fair way since you are always allowed to give your part of the story to a judge as to why you aren't paying your debts.
The collection agency has no authority to seize any of your property, including your car without going to court first. The only scenario where your car can be seized is if you issued it as security to the loan that you took. Your car is otherwise safe and can't be touched by the collection agency. You have the right to forward any complaints to consumer protection if you are being aggrieved by the collection agency. You are still entitled to all your rights despite the fact that you owe your lender money.
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