Debt collection can be one of the more frustrating and challenging aspects of running a business. Recovering unpaid fees from delinquent customers is time consuming and often unproductive. The inherent challenges of debt collection lead many companies to request the services of a debt collection agency to aid in their attempt to recover outstanding debt.
While some businesses have internal departments set up to handle their debt collection problems, others find the simplicity of outsourcing the task a better option. In 2005 alone, debt collection agencies managed to recover $39.3 billion dollars in debt. The list of companies that rely on debt collection agencies includes: federal, state and local governments, as well as retail and service businesses.
For a fee, a debt collection agency will pursue the payments that individuals or businesses owe another company. Some debt collectors will also purchase debts from their creditors, at a reduced price, with the goal of recovering more money from the debtor than they paid to purchase the debt. Creditors often find this transaction agreeable because they receive more money than they were able to collect from the debtor themselves. Additionally, once they’ve sold a debt, creditors are able to remove the debt from their accounts receivable records.
With more than 6,500 collection agencies in the US alone, selecting a debt collection agency can be a tricky process. Knowing what type of agency and which services will be relevant to your needs will affect your decision-making process. The Debt Collection Buyer's Guide provides information on how to choose which debt collection agency is best suited for your needs. The Buyers Guide also provides common debt collection terminology, how to choose a debt collection agency, a debt collection checklist, and articles related to the topic of debt collection.
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