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Collecting Your Debts: What Can Owners do to Collect What's Owed? 
 
by Laura Rice October 15, 2005

Collection Agencies

If your collection letter goes unanswered and attempts to work with your debtor is unsuccessful, the next step is to contact a professional collection agency. Utilizing a third party agency can greatly improve your chances of catching the debtor’s attention, since debtors are normally more than happy to do what they can to avoid a collection agency reporting or bad mark on their credit report. Communication from a professional agency also appears much more formal than your own collection letter and will show the debtor that you are serious about the collection of their debt. Collection agencies will handle the collection of the debt for you, starting with notifying the debtor that they have been retained to collect the debt and setting out payment options in accordance with terms you, as the creditor, have approved and agreed to. The collection agency will also make phone calls to the debtor if necessary to arrange for payment of the debt, discuss payment options and notify the debtor of possible future collection activity and consequences if the payment goes ignored or unpaid. The collection agency will keep you updated during the entire process and advise you of all ongoing activity with the debtor. Keep in mind that even though you have obtained a third party to assist in the collection efforts, you still maintain control over the settlement amount offered to the debtor, the choice of whether to accept a payment arrangement and all other important aspects of the collection. Delegation does not mean you lose control over the collection of your money.

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