subject: How Does A Collection Agency Work? [print this page] It is deemed that if a collection agency contacted you it may lead to unpleasant experience. Usually, this kind of agency is paid by other organizations and banks to collect unpaid debts from their customers. However, there are instances in which collection agency makes simple acts as dreaded tasks. That is why it is necessary to know how you will work or deal with them. Likewise, you should also know your obligations and rights. In this sense, it is important to have some knowledge about collections agency.
Usually, collections agency will contact you in case you have financial obligations from a bank or other lending companies that are unpaid. If this is the case, the first step that you should do if you receive communication from collections agency is to contact them immediately. Likewise, whether you owe the debt or not you should contact them quickly. Though you have the legal rights yet the time of executing those rights is limited. Otherwise, if you will just ignore the problem it will end up to court judgment that will be disadvantageous in your part.
On the other hand, you can also impose bargaining power to the collection agency. Make sure to use the bargaining power in negotiating for the best settlement. While doing the negotiations you should keep in mind that the main objective of the agency is to make profit by collecting the most money from you without filing lawsuits or harassing you. Otherwise, they will file lawsuit against you. If this happen, you might end up paying more than the debt you owed because you will be required to pay for the court costs as well as attorney's fee.
That is why as much as possible you should ensure to make a win-win negotiations until you reach to an agreement. In case you come up with an agreement make sure to put in writing. You should ensure that everything is stated in the agreement so that if anything goes wrong you have the bases.
Moreover, if you received communication from a collections agency you should ask them for accurate representations and identification. See to it that the collection agency is not giving false representations that might deceive you. Likewise, the amount you owed should be stated in the communication. In this way you clarify with them if their assumption is valid or not. But you should do the verification within 30 days otherwise they will assume that it is valid.
Therefore, in order to avoid the circumstances of dealing with collections agency, it is ideal to pay diligently all the financial obligations you owe. Likewise, you should keep all the copy of receipt that will prove that the debt is already paid. You should also explain candidly the details to the collection agency but you should be truthful. Always remember that once you borrow money from others it is your obligation to repay. This is applicable even with your family, friends and relatives. Otherwise, you will end up facing the consequences of dealing with collections agency.
