Debt Relief:Collection Agency

A Collection agency is not the same as a debt counseling service. Collections agencies are employed by creditors to recover money owed to them.

Creditors wait from six months to two years before turning a bad account over to a collection agency. There are different reasons why the debtor ends up in collections: poor money management skills, illness, no money to pay, and sometimes the debtor just does not care to repay the debt.

The following information was gathered in an interview with the manager of a local collection agency:

• A collection agency goes after an individual who will not pay a debt. this debt is anything from medical bills to florists bills.
• Creditor may not seek a collection agency help for 6 months to 2 years after the debtor is delinquent.
• Reasons why debtors do not pay vary. Some reasons are poor money management skills, illness, and lack of desire to pay what is owed.
• Collection agencies charge a percentage fee for the service it provides.
• The methods used by credit agencies to collect unpaid accounts telephone calls to the debtor, lawsuits and garnishments. Collection agencies will provide a pay plan as well.
• If the debtor does not pay using a pay plan, the collection agency will sue or garnish the wages until the debt is settled.

One thing to keep in mind: If there is debt, it does not go away if ignored. The best way to manage it is to face it head on and explore options available.

Bankruptcy is recommended by collection agencies if the debt is severe and there are personal reasons for not be able to pay. Credit counseling is also recommended.