Debt collection is the legal procedure of trying to recover payments of outstanding debts owed either by individuals or companies. An agency which specializes in debt collection is called a collection agency or debt collection agency. Agencies are also known as credit agencies, processors, debt collectors or posh cleaners. Collection agencies have the legal right to contact your creditors and make collection calls to get the payment back on delinquent accounts. The practice of using third party collection agencies came into being when the government allowed banks to hire their employees to collect debts from delinquent customers.
In the past, these agencies were paid by the amount they collected from customers; however, the practice has changed and the bank can now collect the unpaid debts by charging them a fee. This fee can be substantial, and it serves as a source of revenue for the debt collection agency. The agency then uses the money to pay off your creditors, so you can avoid further phone calls. However, if you are not able to pay the amount owed, the credit card company will still be in charge of making your phone calls to the agencies. In the long run, this means more unpaid debts for you.
How do debts in collections affect you? One of the most important effects of having debts in collections is that you can face legal action against you. If the bank that you owe money to does not respond to your collection efforts, your next step is to see a debt attorney who can draw up a legal document called a Notice of Infringement. This not only gives you notice that you are being sued for the outstanding debts, but it gives you specific instructions on how to do debts in collections affect you.
Before you start contacting your debt collectors, you need to have all of your financial records in order. This means gathering up all of your credit card bills and writing down the account numbers, the amounts owed, and the names of any collectors who may be calling you. You should keep this information in a safe place, such as in your home, for now. Contact the credit card companies and ask them to send you a letter indicating whether or not you are eligible for a new account. If you are eligible, you can apply for a new credit card, but the notice period won’t begin until you get this letter from the debt collection agency.
You should also keep track of any credit reports that you get from the debt collection agency. When contacting the agencies, they will ask to review your credit reports. If you owe a large sum of money and you don’t have enough good accounts in your report, your debt collector may end up reporting your account as “paid,” even though you still owe the money. To avoid this problem, make sure all of your reports are correct, even when you dispute an account that isn’t accurate.
Debt collection agencies are prohibited by law from harassing you, violating your privacy rights, or using obscene language. But there are a few things that these agencies can do to protect themselves. For example, collectors cannot use profane language when calling you, they cannot make false promises about how much you owe, and they can’t threaten you with violence or harm (including false arrest or legal action). In addition, a debt collection agency can report you as a “spammer” if you complain too much about being contacted by them. Finally, they cannot open a new account in your name unless you give them permission and they can’t change the balance on an existing account without your approval.