subject: Debt Brokers [print this page] I am not a lawyer, I am a judgment and debt matchmaking specialist (Collection Broker). This article is my opinion, based on my experience in California, and laws are different in each state. If you ever need a strategy to use or legal advice, you should contact an attorney.
A collection broker (also called a debt broker) helps people that own debts or judgments to the same day find the right 100% contingency collection agencies, to enable creditors to have the best chance of getting repaid.
There are millions of debts and judgments, and many hundreds of collection agencies, so why should a debt broker be needed? One reason is because a debt broker knows the right collection agencies in every state, and only refers creditors to the best.
Another reason a debt broker is required is because debts or judgments are never worth a fixed amount like gold or money. A judgments or debt's value depends on the debtor and their assets, the economy, laws, and the abilities and location of the collection agency. A collection broker knows the best collection agency for every judgment or debt situation.
One other reason is that collection brokers do good work and work with volume, and have negotiated discounts for the creditors. Most debts or judgments are never recovered because laws tend to make it difficult to collect from debtors. A collection broker helps to change those odds, and makes sure the collection agency is licensed in the same state as the debtor's assets.
What does a debt broker do? They answer questions from creditors, and research debtors using public data records, noting all the factors that determine which company is best suited to collect the judgment or debt. Then, they refer the creditor to the best collection agency. A debt broker (and anyone else) should only be paid if the creditor is repaid.
The debt broker is only paid for the creditor's success, so they have the right incentive to pick the best-suited collection agency to maximize the chances for more successful collections on each possible judgment or debt.
A debt broker maintains databases of good collection agencies close to the debtors and their assets. For every judgment or debt, the debt broker contacts collection agencies near the debtor's assets, sometimes discussing the debt or judgment with several collection agencies. This is done, usually in one day, with no hassle for the creditors.
Only after a match of the right collection agency for a particular debt or judgment has been completed, the collection broker contacts the creditor. After the debt broker introduces the creditor to a collection agency, the debt broker is out of the picture. The collection broker then moves on, to help the next creditor.
Note that a collection broker never owns debts or judgments, and collection agencies do not require judgments or debts to be assigned to them, because they work on behalf of the creditors.
A collection broker cannot guarantee the performance of the collection agency they recommend, because nobody can predict the future.
Using a collection broker usually costs the creditor either nothing, or at most 2 percent of what is collected. In return for discounting their rates for the creditors, the collection agencies get pre-screened judgments or debts.
The debt broker performs an important role in helping both creditors and collection agencies increase their chances of getting repaid.
