subject: The Best Collection Agencies [print this page] I am not a lawyer, I am a judgment and debt matchmaking expert (Collection Broker). This article is my opinion, based on my experience in California, and laws are different in each state. If you ever need legal advice or a strategy to use, you should contact an attorney.
While there is a wide variation on the way collection agencies work to collect money from debtors, now almost none currently engage in the stereotypes of abuse that were more common many decades ago. While there are bad apples in every profession, most debt collectors are reasonable and polite, at least as much as the debtors.
Every collection agency starts with a phone call and/or a letter, because:
1) A small percentage of debtors pay when they get first notice of the debt, as a few understand this is now serious.
2) It gives the debtor a chance to contest the debt and explain their side of the story, because once in a while, the debt is not legitimate. Some examples of this are if the debtor filed for bankruptcy protection, or a judgment against them has expired or was vacated.
3) Laws require that debtors get mailed mini or full "Miranda" wordings, telling them of their rights, how to dispute the debt, how to contact a government agency, etc.
The mini Miranda, has words similar to "I am NAME, of this BUSINESS-NAME, a debt collector representing CREDITOR-NAME. Information obtained during the course of this call will be used for the purpose of collecting the debt." Similar words need to be included in all phone conversations, and on all letters.
After some time has passed, usually thirty days, most collection agencies call or write again, until one of two things happen:
1) They succeed in making friends with the debtor, and figure a current or future payment plan. Once in a while, they will visit the debtor's home for a friendly face-to-face discussion.
2) The debtor informs them in writing to stop all communications. This is somewhat like asking a painful tooth to stop hurting, because it does not stop collection actions, and debtors will still receive all legal notices. Sometimes their next step is placing the debt on the debtor's credit report. Then more waiting, and if there is no judgment yet, sometimes they sue the debtor to get a judgment. Having a judgment is the key to being able to request that a sheriff seize the debtor's assets.
After there is a judgment, many collection agencies hire private investigators to find the debtor's assets, and their attorneys to collect the judgment. Most collection agencies do not need to own your debt or judgment, because they work on your behalf.
Most collection agencies charge between 25% to 50% of what is collected, depending on how new the debts are, how much is owed, and how many fees they charge. At 50% there should be no upfront or any other costs, at 25% you should expect to pay some fees. Most collection agencies charge an upfront fee for unlawful detainer judgments.
A debt or judgment broker knows the best collection agencies, and brokers are easy to find with a web search.
