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Exposing the Truth About Debt Collectors

June 27, 2012 | Comments: 0 | Views: 120

If many films and TV soaps like Coronation Street are to be believed, then all debt collectors are nothing more than vicious thugs who will go to any and all lengths to part you, or anyone associated with you, from your cash, or goods to the value of. Yet, where legitimate debt collectors are concerned, nothing could be further from the truth.

Contrary to popular belief they are not bailiffs as they have no powers to seize goods or chattels to cover the value of the debts plus any associated costs. Nor are they about riding roughshod over people who are down on their luck, often through no fault of their own.

The Secret of their Success

In today's extremely challenging financial climate collection agencies provide an essential service to all sorts of businesses, in helping to keep them financially solvent and they do this in the following way.

When a company gets swamped with bad debt, it has a serious dilemma. While it can devote more of its resources to recovering that debt, with no guarantee of a return on its investment; that means less resources are spent in generating new business and growing the company, which it needs to do in order to survive.

When faced with such a dilemma, it has two choices. It can offload the debt by selling it cut price to a debt purchase company, in which case it loses a customer, or it can pass it to a collection agency to recover the debt on its behalf, which is then paid a percentage of whatever monies they collect from the debtor.

This means the company is getting some of the monies owed, back without incurring any further financial liability which then leaves it free to continue concentrating on growing its own business.

How Debt Collectors Work

It may surprise you to know that legitimate collectors are not about forcing people to cough up. Rather they are all about helping those people who are serious about paying off their debts do so with the minimum hassle and expense.

With the interest on the debt usually frozen and the freedom to renegotiate payment terms with debtors based on their current circumstances, a collector is able to help the debtor come to a payment arrangement that is both affordable to themselves and acceptable to the client.

Through taking this sort of approach it also helps maintain a certain amount of goodwill between debtor and creditor so that once any arrears are sorted out they may continue to do business with each other in the future.

I hope you enjoyed this article and found it informative. If you did, please come visit us at The Debt Meister for more information about this and other debt related matters.

Source: EzineArticles
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