The Debt Owed May Be Club Fees, Telephone Bills Etc

Category: Finance, Credit.

With increasing defaults on debt due to a number of reasons, recovery or collection agencies are also specializing in handling various types of debt defaults depending on the nature of industry.

S. amounted to a huge$ 32 billions as per American Collector Association figures. The magnitude of the problem can be gauged from the fact that in 1997 alone the total amount recovered by collection agencies in U. This article discusses some of the specializations in the debt recovery industry. The recovery procedure should be strictly in accordance with the provisions of law. Medical or health care collection agencies partner with health care providers like hospitals and doctors clinics to recover legal debt that may be owed by companies or individuals availing health care. This partnership allows the health care providers to focus on their job instead of pursuing defaults in payments.

The debt owed may be club fees, telephone bills etc. Consumer recovery agencies provide services to retail operators like health clubs, telephone and other service providers. Commercial recovery agencies are those who serve banks and other institutions in the financial sector. They usually buy the bad debts at a discounted rate from the institutions that gave the loan and then proceed to recover the debt. Bad debts like credit card default, overdue loans on automobiles, pending mortgage payments etc. are some of the cases handled by these agencies. Agencies that handle bad checks usually pay a sum upfront to the creditor as a percentage of the check amount.

Hence they may prefer to hand over the case to a recovery agency that has the necessary resources to pursue it and recover the dues. It may not be possible for an entity like say a consumer durables store to pursue each and every case of bouncing of checks. There are also specility collection agencies that collect for different industries such as: libraries, etc, utilities. This can be helpful if you industry is highly regulated or has multiple payer sources. These speciality debt collectors have very specific knowledge in these certain industries. Once a bad debt account has been handed over to a recovery agency and the agency agrees to pay cash to the creditor as a percentage of the debt to be recovered, the liability of the debt gets passed on to the agency.

The creditor would not mind paying an upfront fee as recovering a bad debt would involve time and money even if done in house. This enables the creditor to show a healthier balance sheet.

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