subject: Picking A Collection Agency [print this page] I am not an attorney, I am a judgment referral specialist (Judgment Broker). This article is my opinion, based on my experience in California, and laws are different in every state. If you ever require legal advice or a strategy to use, you should contact a lawyer.
When you own a judgment or debt, there are no guarantees one will collect anything. However, many people wish to try. When you try, there are many choices, that range from trying to do it yourself, to which professional you will use, to attempt to recover some of what the debtor owes you.
Recovering debt or judgment money is usually very expensive and time consuming. Be prepared to share a big portion of what is collected with any company that helps you collect your money.
Which factors should one consider, when choosing the best collection agency? The six factors to consider when choosing a collection agency are their costs, location, contract, ownership policy, effectiveness, and customer service.
1) Costs: There are trade offs, with the costs of any recovery effort, or retaining any collection agency. Pure contingency, where one pays nothing, moves all the risks to the agency, and they must charge more. When a contingency charge is reduced, the fees you need to pay usually increases. When you pay a bigger share to get your judgment or debt recovered, there should not be any extra up front, or other charges.
If the debt or judgment, and the debtor's assets are big, you might be able to get a better rate, however this is rare as many debtors don't hold onto money very long.
2) Location: It always helps the chances of collecting when the collector is close to the debtor and their assets. The best collection agencies have private investigators and lawyers in each state, in case the debtor relocates.
3) Contract: The best contracts are not too long, have large type, are written to be easy to understand, with costs and terms clearly explained.
4) Effectiveness: The old school collection agencies usually used only the primary tactics of nagging debtors into paying. All collection agencies begins by calling and writing letters to the debtor, then often places the debt on the debtor's credit report. Some stop there, and do very little more. The best collection agencies start with the same methods, and then use private investigators to find debtor assets, and their attorneys, to seize the debtor's assets to get you paid.
5) Ownership Policy: The best collection agencies let you retain ownership of your judgment or debt. The best will admit when they cannot make any more progress, and inform you of that in writing. The good news is one always owns their judgment or debt. The bad news is, if a quality company cannot recover any money, who can?
6) Customer Service: The best companies and people are rarely flakes. A drawback of a sole proprietor is if they become sick, busy, or detained, they may not be able to respond in a timely manner. It seems medium-sized businesses are best, because when a company becomes too big, often one hand does not know what the other hand is doing.
A judgment broker know the best collection agencies nationwide, and can save you a lot of time by finding the best collection agency for you.
