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Posts Tagged ‘collections agency’

With consumer debt at an all time high, owing a debt can seem very overwhelming. A great deal of people have looked into the world wide web and have seen advertisements alleging that they can offer debt relief as a quick fix. As alluring as these ads may seem, it is important to be on the lookout for the validity of the claim.

Many of these claim they can offer a quick fix, but that quick fix might be bankruptcy. And while bankruptcy is one way to attack your financial problems, in most cases it should be a last resort. The fact that you claim bankruptcy will stay on your credit report for ten years which means that your chances of getting credit, jobs, a place of residence, or insurance are significantly lowered.

It’s always a good idea to consider other options before deciding to file for bankruptcy. Talk with your creditors. Many times a re-payment plan can be worked out that is modified or can be paid in installments. Credit counseling services can work with you and your creditors to make debt repayment plans.

If you are thinking about a second mortgage, be wary. These loans need your house as collateral. Bankruptcy can put an end to foreclosures, debt collection activities and it may rid you of unsecured debts. Exemptions are also provided that allow you to you hold on to certain assets. However, personal bankruptcy does not usually eliminate child support, fines, taxes, alimony and in some cases student loans.

Usually it will not let you hold on to your property if your creditor has a mortgage or security lien that hasn’t been paid. A relatively recent change in bankruptcy laws makes certain hurdles that you must get through before you can even file for it, no matter what type of bankruptcy. First, you have to get credit counseling from an organization approved by the government within six months before filling.

Also, try to keep in mind that in certain cases you must pass a test that requires that you confirm that your income level doesn’t exceed a particular amount.

Rapid Recovery Solution is a national collection agency. Get a totally unique version of this article from our article submission service

What is a collection company?

There are two possibilities.

A few creditors will try to deter a debtor by utilizing a separate company name, address, and phone number for their internal collection departments, with the purpose of giving the impression of an “outside” agency. This strategy is should only be used when the debt is recent (under six months past due.)

But the vast majority collections activity is performed by a third-party debt collection company, which are separate from the original creditors, and “work” debts on behalf of various lenders. These companies are hired out to collect from the creditors. They may also buy bad debts which have been designated as charge-offs by the original creditor.

This article will spotlight 3rd party collection companies

How does a debt collection company get money?

Third-party debt collection agencies typically work on commission, this is where they receive a percentage of the amount that they collect. Individual collectors are often paid a low base wage plus commissions based on their personal performance.

A number of companies buy huge groups of charged-off bad debts for a small percentage of the face value (amount owed.) After a debt is sold, the debtor now owes the full amount to the purchaser. Since the chances of recovery decrease substantially with time, an agency might only pay 1% – 5% of face value. The agencies’ profits come from the difference between the purchase price and the amounts that are eventually collected.

How do debt collection companies work?

The main tools of a debt collection agency are telephone calls and letters.

What is the deal with collections letters?

The 1st demand letter must state that the recipient has the right to dispute the validity of the debt or request verification of the debt (in writing). By law the agency must send some confirmation after verifying it with the original creditor. Demand letters should additionally have the statement that they come from a debt collector, and that any information obtained will be used for the purpose of collecting said debt. Collectors are not permitted to print anything on the outside of the envelope which may indicate or suggest that this is a collection attempt. The return address label must also be discreet, so many companies will just use their company’s initials, or some other nondescript name.

Rapid Recovery Solution is a national debt collection company. Visit the Uber Article Directory to get a totally unique version of this article for reprint.

You should call in a credit collection agency sooner rather than later. The longer you wait to begin the collection process on overdue accounts, the less of a chance you’ll have at recovering your money.

The day after an account becomes overdue, you should place a polite phone call to the customer who owes you money. If that doesn’t work, you may want to send a few reminder letters yourself, or you may want to go directly to a credit collection agency. Base your decision on how much money is owed to you and the history of your relationship with the customer. If it’s the first time you are doing business with them, you’ll want to call in a credit collection agency sooner than you would with a 10-year old customer with a solid credit history.

Most companies call in a credit collection agency once a debt is 60 days to 90 days past due. If you wait much longer than 90 days to begin recovering unpaid receivables, your chance of collecting drops dramatically.

If you discover that your account has gone out of business, find out what type of business it was – a corporation, a partnership, or a proprietorship. If it was a corporation, don’t bother calling for the help of a collection agency. It is doubtful that you, or any one else, will be able to squeeze the last few nickels out of that client. If the company is a partnership or a proprietorship, you may be able to get the individual owners of the company to pay you out of their own pockets.

If you try to recover an account and fail, consider that bad debt a tax-deductible item (Tax Code IRC 166, Reg. 1.166). You will be able to deduct the cost of the goods sold (but not paid for) as an ordinary business expense. You can’t deduct any lost profits from the sale, nor can you deduct the money owed for services rendered.

Rapid Recovery Solution is a third party debt collection agency. Grab a totally unique version of this article from the Uber Article Directory

It is important that debt collectors respect your privacy. According to the Fair Debt Collection Practice Act, debt collectors cannot exchange information about people that owe a debt. They can’t distribute a list of debtors to its creditor subscribers. They cannot advertise a debt for sale, or compile a list of debtors to its creditor subscribers.

They cannot advertise a debt for the use of sale, or make a list of debtors for sale to others. They are prohibited from leaving messages with third parties asking the debtor to call them. The exterior of envelopes sent by collections agents cannot indicate the purpose of the letter in any way. Postcards are never allowed.

A collector is permitted to send mail in care of another person only if you reside at that address or if you receive your mail at that address. If you share your address with others the mail should be labeled “private” or personal. Basically, the letter can’t give any appearance alluding to the fact that it is a collections bill.

A debt collector that knows your name and telephone number and thus can contact you directly is not allowed to contact your neighbors or family members. If they cannot locate you and they do call your family members or neighbors, the collector must identify themselves by name but not disclose the fact that they are a debt collector.

They can’t tell others you owe money or speak to them about account details. They cannot contact the person more than once, can’t leave information about a the money on another person’s voicemail and they have to disclose the name of the collection agency but only if asked.

If you are being contacted by a collector looking for your former roommate, relative or neighbor, the Fair Debt Collection Practice Act says a collector can only be in contact with you to find the location of the person who owes the money. Only if the collector believes you have new information can they be in touch again. If a collector contacts you repeatedly about a third party that can be considered harassment and you can file a complaint.

Mallory McGuinness-Hickey is employed by Rapid Recovery Solution and writes free lance articles on debt collection and finances.

Pay cuts and Layoffs put more people into bankruptcy last year, and researchers allege that the situation will not be likely to improve until the unemployment problem is resolved. In Wisconsin, bankruptcy filings raised to 30 percent in 2009. This came on top of a 35 percent increase in 2008.

Bankruptcy lawyers claim that not only is it layoffs and firings that are motivation to file. It’s the losses of once-regular over time pay and full time status that have left consumers unable to keep up with monthly payments that in the past were not a problem to take care of.

U.S. Bankruptcy Court records illustrate that there were 27,413 bankruptcy petitions filed in Wisconsin in 2008. More than eighty percent of these cases were Chapter 7 cases. Chapter 7 takes out medical bills, credit card balances, and other types of debt. Recent Research by The Associated Press illustrated that more than 1.4 million bankruptcies were filed in 2009, an increase of about 32% from 2008.

And although bankruptcy takes care of the looming debt and gives debtors a fresh financial start, consumers often remain unemployed and are not able to find any new type of employment to get an acceptable income again.

As if that wasn’t enough, unless the economy gets good enough for industries to start hiring again, there isn’t much reason to believe that bankruptcies will go down in 2010. Analysts have mentioned that home foreclosures will continue to pile up in 2010 because people who previously had adequate credit have lost employment and cannot keep up with payments.

Bankruptcy could seem like a good option to get a fresh start, but it has a negative effect on your credit report for ten years, leaving you unable to get a car, place of residence, or employment. Before declaring bankruptcy, it might be a wise decision to speak with your creditors and see if some sort of repayment plan can be worked out.

Mallory McGuinness works for a debt collection agency. Also she writes articles on business, finance, the credit industry and collection agencies. Grab a totally unique version of this article from the Uber Article Directory

We’ve all seen them – the flashy “Cash4Gold” commercials, at times they feature people on the street dancing, or at other times, M.C. Hammer promising fast cash in turn for your old, unused jewelry. Although human nature makes us want to unconditionally trust the dancing person or even with his track record, M.C. Hammer, it turns out that Cash4Gold may not in fact be too legit to quit.

In recent news, Representative Anthony D. Weiner fingered Cash4Gold because of their bad business practices. Making a speech in front of jewelry appraisers that were legitimate, Weiner requested consumers to take their business to a place that they knew was valid as opposed to the shady mail in gold exchange.

The way that Cash4Gold works is that consumers use special envelopes to mail jewelry and gold to the company’s offices in Florida. According to the advertisements, the company will provide customers with a quick appraisal of the value of the items they have sent, and then they will mail them a check for that amount.

Apparently customers are given a twelve day period in which they are able to return their check and get the jewelry back. Yet according to research by Rep. Weiner and Consumer Reports, Cash4Gold paid out only 11 to 29 percent of the actual value of valuables sent to them, and they often refused to send jewelry back when it was asked to do so within the 12 day period.

Weiner proposed that the Federal Trade Commission should do some research the whole Cash4Gold problem, adding that he wants to introduce laws that would regulate companies that use mail to exchange cash and jewelry.

This legislation would put fines on companies that melt down gold without the owner’s permission or before a return period has been passed. It will make companies allow enough time for consumers to request a refund and make sure that companies actually insure the jewelry they are returning to consumers.

Mallory Megan works for a debt collection agency. Also she writes articles on business, finance, the credit industry and collection agencies. Get a totally unique version of this article from our article submission service

Discover Financial Services, facing the demand for added funding while profits are diminishing and credit card charge offs are amplifying, received only a indifferent response from the equity market as a public offering last week of its ordinary shares had to be priced at a 12 percent markdown to the market.

Right now there is a outstanding mass of risk aversion when it comes to credit cards, said Dan North, chief economist at Euler Hermes ACI, a trade credit insurance firm.

The credit fright started last fall. As a result, people have begun employing their credit cards less, meaning less interchange proceeds from transactions. The credit card firms have also become watchful, carving credit lines, hiking up fees and altering interest rates from fixed to changing, both in response to the need for more revenue now and to prepare for the restrictions from the Credit Cardholders Bill of Rights, which goes into effect next year.

According to North, Discover cardholders have frail credit ratings, on a whole, than holders of MasterCards, Visas and American Express cards, though those companies are fighting the same financial challenges.

All of those factors have also made it difficult for a new competitor in the market, Revolution Money, a payment platform complete with credit card and money transfer service designed to compete with major card companies Visa, MasterCard, Discover and American Express. Revolution LLC, headed by AOL founder Steve Case, had hoped to compete mainly by offering better security through a chip-based card and lower interchange fees to merchants.

A group of niche players that are acquiring more traction now, according to a Scripps Howard News Service report, is peer-to-peer lending (P2P), which effectively avoids traditional financial institutions. P2P lending services bundle pledges from individual investors and offer small loans to other individuals at attractive rates, a model that could evolve into direct competition for credit cards.

Mallory Megan is employed by a debt collection agency. She also writes stories on business, finance, and collections agencies.

The government is stepping up as debt collection scams rise. In recent news, Buffalo New York has been home to a number of unlawful debt collection practices, and authorities have arrested at least twelve people. Although the vast majority of collection agencies are legitimate and good for the economy, there has been a rising amount of deceptive and illegal practices.

In Buffalo, collections agents have been caught calling up people that owe money and posing as law enforcement. They have threatened to send people that owe money into jail, or even take child custody away from them. But it doesn’t stop there.

A recent civil case imposed a $675,000 penalty ever imposed on a debt collection business, for illegal and deceptive practices. This includes harrassing and lying to consumers, cashing in on post dated checks early, and disclosing their debt to third parties. These tactics came by deceptive claims from agents saying they were lawyers or other figures of authority.

In addition to refusing to reveal the address or phone number of the “company” these agents even went as far as to call people who were not in any debt at all and attempted to collect money from them. Even though the owners of said companies alleged that it was individual workers acting fraudulently, the Federal Trade Commission went after the business owners and won a case that imposed the biggest penalty ever for debt collection agencies.

To skirt the issue of being a victim to fraudulent collection agencies, it is imperative that you know your rights. A collection company can never seize a debtor’s assets, bank accounts, or paychecks. They can not get a debtor fired from their occupation, and cannot make any kind of public disclosures concerning the debt, and they can definitely never threaten or engage in violent acts.

For more information, refer to the Fair Debt Collection Practices Act, which outlines the rules and regulations of debt collection.

Mallory McGuinness is employed by a collections agency that works with a debt collection lawyer. Also, she does stories on business, finance, the credit industry and collections agencies. Visit the Uber Article Directory to get a totally unique version of this article for reprint.

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In the midst of the real estate boom, many homebuyers extended their finances to purchase a house that might have been beyond their means. With the market on fire, people were apt to buy with low introductory interest rates and interest-only loans. They believed that their income would increase to meet their payments and predicted that real estate prices would never fall. Unfortunately, adjustable-rate mortgages have adjusted and monthly mortgage payments have gone up. Couple that with the fact that income hasn’t increased, and you will see why more people have fallen behind with their mortgage payments.

As house prices diminish and with interest-only mortgages on the decline, more homeowners actually owe more on their mortgages than what their house is worth. It doubtlessly has occurred to many homeowners that this makes sense, as many are defaulting on mortgage payments as we speak.

Quick breakdown to explain the situation: you purchase a house for $400,000 that is now worth only $300,000. Thanks to an interest-only mortgage, you still owe $400,000. If you erased this off of your balance sheet, your net worth will increase by $100,000. Granted, you’d still need a place to live, but from this point you could purchase a more affordable house or rent for a bit of time.

However there is one large drawback to abandoning your house. If you do, you will trash your credit rating, making it difficult or even impossible to rent an apartment, get a new mortgage, and even a job. There is a huge drawback to abandoning your responsibilities. If you walk away, you will destroy your credit rating, making it more difficult or impossible to rent an apartment, qualify for a new mortgage, and perhaps get a job.

New legislation is out now to be of assistance to families facing foreclosure, which will encourage people to pick alternative options other than abandonment.

Mallory Megan is employed bya debt collection company. Click here to get your own unique version of this article with free reprint rights.

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