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  Chapter 9
  If You're Having Money Problems
  Make a Simple Budget
  Paying Down Your Debts
  Contact Your Creditors
  Late Payments
  Re-Aging Your Accounts
  What Will Creditors Do?
  Collection Agencies
  Debt Collection Laws
  What Collectors Can't Say
  Things You Shouldn't Say
  Statute of Limitations
  Negotiating With Collectors
  Why Will a Creditor Settle?
  Negotiating Your Score
  Once You Have an Agreement
  Credit Counselors
  Avoiding Scammers
  Debt Consolidation
  Playing Hardball
  Conclusion
  Previous Chapter
  Next Chapter
  Contents

 

Collection Agencies

Collection agencies work on what is, essentially, a commission basis. They get a cut—sometimes as much as 50 percent—of any money they collect. The rest of the money then goes to the original creditor.

In a few cases, collection agencies will actually buy debts from credit companies and collect these debts as their own. However, this practice has come under closer government scrutiny…so it’s not as appealing to collectors as it once was.

Needless to say, collection agencies are very motivated to extract whatever money they can from you. That’s how they get paid.

That’s one reason people at collection agencies are not known for their charming telephone demeanor. However, they also cannot get on the phone and simply rail at you, day and night.

Next: Debt Collection Laws

 

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