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[[Debt Relief | Debt Relief Home Page]] | |||
A Collection agency is not the same as a debt counseling service. | A Collection agency is not the same as a debt counseling service. | ||
Collections agencies are employed by creditors to recover money owed to them. | Collections agencies are employed by creditors to recover money owed to them. | ||
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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. | 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 following information was gathered in an interview with Sandra Harden, Manager of Bibb Collections. | ||
* A collection agency goes after an individual who will not pay a debt. This debt is anything from medical bills to florists bills. | * A collection agency goes after an individual who will not pay a debt. This debt is anything from medical bills to florists bills. | ||
* A Creditor may not | * A Creditor may not employ a collection agency for 6 months to 2 years after the debtor is delinquent. | ||
* | * Bad debt is referred to a collection agency because the debtor has ''poor money management skills, is ill, or has a lack of desire to pay'' what is owed. | ||
*Collection agencies charge a percentage of what is collected as a fee for the service. | *Collection agencies charge a percentage of what is collected as a fee for the service. | ||
*The methods used by credit agencies to collect unpaid accounts are telephone calls to the debtor, lawsuits, and garnishments. Collection agencies will provide a pay plan as well. | *The methods used by credit agencies to collect unpaid accounts are telephone calls to the debtor, [[Debt Relief:Definitions#Sue or suit|lawsuits]], and [[ Debt Relief:Definitions#Garnishee or Garnishment|garnishments]]. Collection agencies will provide a pay plan as well. | ||
*If the debtor does not pay using a pay plan, the collection agency will | *If the debtor does not pay using a pay plan, the collection agency will [[Debt Relief:Definitions#sue or suit|sue]] or [[Debt Relief:Definitions#garnishee|garnishee]] the wages until the debt is settled. | ||
Something 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. | Something 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 | [[Debt Relief:Definitions#Bankruptcy|Bankruptcy]] is recommended by collection agencies if the debt is severe and there are personal reasons for not being able to pay. | ||
Credit counseling is also recommended. | Credit counseling is also recommended. |
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