Debt recovery agency is the procedure of chasing payments of outstanding debts of people or companies. A collection agency which is specialized in debt recovery is called as debt collector or collection agency. Collection agencies to collect delinquent and unpaid debts from people or organizations, for which they are not legally liable. These companies engage in the business of recovering money owed to them from debtors who have not paid. Debt recovery agencies can be hired by consumers for collection debts.
A debt recovery agency can be a third party company which collects debts on behalf of creditors. It is in the interest of creditors to hire third party firms for the collection of their outstanding obligations. Creditors also prefer to deal with debt collection agencies as these third party companies do not put them at risk of going out of business.
Under normal circumstances the debt recovery process starts with the collection letter. The letter informs the debtor that he has fallen behind on his outstanding obligations and asks him to make immediate payment. The agency then offers the debtor a settlement option. If the debtor makes the payment in time, the creditor issues a letter of demand to the debt recovery agency.
Under normal circumstances, a debt recovery agency does not ask for the original creditor’s consent before going ahead with the debt recovery process. However, it is important to note that the original creditor does not always agree to the collection of the accrued amounts. When this happens, the debt collector may try to get the consent of the original creditor for pursuing the debts. If the original creditor agrees to the terms, the debt collector will inform the debtor and inform him that he is legally entitled to the money. The debt collector will then proceed to collect the amount.
The debt recovery agency will have to follow the legal procedure for recovering the money. The debtor should file a report to the local state authorities and to the national credit bureaus about the past due accounts. This will help the debt recovery agency to recover bad debt. The debtor will be required to make payment to the company to recover bad debt. In some states, the debt recovery agency has the right to auction a property if necessary to collect the past due amounts.
One should not worry about the above mentioned process. One has to hire the services of debt recovery agencies to collect debts. These agencies collect overdue bills from various creditors. They do not contact the creditors directly and they do not threaten them in any way. This helps the consumer to avoid further antagonizing the creditors.