Keys to Dealing with Collection Agencies 

A debt collection agency's worst enemy is an educated and vigilant consumer. The single fact they really don't like anyone collection agencyknowing is that you have thirty days to dispute the validity of the collection agency's claim on your money. If you don't send a letter requesting validation before the thirty day deadline, the debt will stay on your credit report for seven years – whether you pay it or not. However, properly dealing with a debt collection agency does not end there, and is far from simple. You should do as much research on your own as possible, and get professional help to aid you in figuring out the finer details. A lawyer would be your best option, but if you don't have one on hand or can't afford an attorney, you can take advantage of our debt management counseling at no cost.

Video: Debt Collection Agencies (DCAs)

How a Debt Collection Agency Works

There are essentially two kinds of debt collection agencies - “first party” and “third party.” A first party collection agency is a subsidiary of the original creditor, whereas a third party collection agency is a company that has either been assigned the debt, or purchased the debt from the creditor. A first party collection agency is typically only involved in debts younger than six months. After that point the debt is either assigned or sold to a third party agency and written off. When a third party agency is assigned the debt, they will collect a percentage of the debt owed when collection is successful, but collection agencies which buy debt typically pay either 3 to 7 cents on the dollar, at most.

Empty Threats From Collection Agencies

Video: How to handle debt collection agencies

Although federal law prohibits collection agencies from stating anything which they either have no intention or ability to do, they will threaten with the potentiality of a lawsuit because collection agencies can, in fact, sue. However, unless you have resources which can be exploited and the debt is at least $1,500, the chances of being sued are very slim. Additionally, you should definitely look into the statute of limitations in your state. Many states won't allow pursuit of a debt older than 7 years, some as little as 3 – but you should certainly have a look for yourself and make no promises or payments to the collection agency in the mean time, because that will “reset the clock” on the statute of limitations. The agency may still try to sue after the statute of limitations has expired, and you should show up to court and state that the time limit has expired. Outside of that, a collection agency can harass you until you send a cease and desist letter – at which point they legally must stop all communication with you except for certain notifications.

If the Collection Agency Sues and Wins

If a collection agency files suit and wins against you, then they can and will pass any fees they can, along with seizure of whatever assets you have – such as bank accounts, cars, homes, and bonds such as those construction companies must have in order to operate. When a judge rules in the collection agency's favor, there really is no limit to how badly they can wreck your financial livelihood. Don't let that frighten you though. If you arm yourself with information and professional help (such as our no-cost debt management counseling) you can win.

Points of Contact:

Burnstein & Burnstein, Inc.
800-821-1490

Leland Scott & Associates Inc
(817) 539-7350

A R Recovery Solutions
(808) 678-8100

CNC Financial Group LLC
(843) 836-2051

Alco Collections
(225) 751-5660

C R & Associates
(734) 677-0904

Direct Recovery Associates Inc
(818) 874-0011

Excel Account Systems
(678) 289-0207

G C Service
(858) 577-2300

J Scott NOVY
(903) 753-4955

Lyons Roar Judgement Collections
(877) 242-6553

SouthWest Medical Billing & Collections
(951) 956-8058

Weisberg Law Office
(952) 933-5040

A Nationwide Recovery Network Inc.
(888) 300-5437

Account Collection Service Inc
(360) 574-4131

D & D Debt Recovery Inc
(507) 208-4150

Deb Ron International
(937) 293-8244

Dolce Billing & Corporate Service Inc
(631) 940-1120

Equidata
(757) 873-0519

G L A Collection Company
(502) 267-7522

Greenberg, Grant & Richards Inc
(713) 789-5893

GSI Financial
(985) 871-7100

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