Starting the Collection Process

Hi,
Let's discuss how an account is handled once it reaches a collection agency. After the account is entered into the system, an initial letter is generated notifying the debtor of the obligation, and the necessity to resolve the matter as soon as possible. Many collection agencies have collectors that specialize in a particular type of collection. This allows the collector to become knowledgeable about documentation supporting certain types of debt which enables the collector to communicate clearly with the debtor and develop a good working relationship with the client/creditor. After an account is received by a collector, he or she reviews the financial information provided by the creditor and any previous communications with the debtor. This allows the collector to become familiar with the debtor's capabilities and to formulate an approach suitable to that account. Caller ID has made it necessary for a collector to be as effective and efficient as possible on the initial call, as in many instances, it might be the collector's last verbal contact with the debtor. Unlike many other types of negotiations that take days, weeks, and in some cases, months, a collector needs to go from start to finish in one phone call. This is the reason collectors prefer to receive a lump sum payment on an account rather than a long drawn out monthly payment arrangement. This is not to say that when the need is apparent for monthly payments on an account, a collector will not be more than happy to accept the arrangement. It is important to remember that if a payment is broken with a collection agency, that the full amount will become due with no further payment arrangements accepted. Resolving a debt with a collection agency might prevent legal action against the debtor, or at the very least, significant damage against the debtor's credit report. Tomorrow, I will continue talking about the collection process.
Until then,
Alan