If you have not paid your bills in a timely manner it may very well be that the next phone call you recieve will be from a debt collector.There are several types of debt collectors.Let's take a look at some of the debt collectors that may be calling you.The first kind would most likely be an in-house debt collector.If it is at all possible this is who you would prefer to deal with.
The in-house collector works for the creditor, and therefore has a more power to negotiate a settlement that could be in your best interest.Also they can report your account to credit reporting agencies accurately.Which, if you negotiate correctly could be a great service to your credit report.As with any business dealing be sure to get all agreements in writing with a original signature.
If you have ignored in-house debt collectors, ducked the phone calls and letters.They will charge-off your account, that is write it off as a loss.They will usually then hire a collection agency to do the same thing, the in-house collector does.However with some glaring differences. Collectors that work for these companies are often paid by commission...and not only will some of them tell you anything to get you to send them money. Some of them will even break the law to collect from you.
Finally there is the last step in the food chain so to speak.The junk debt buyer. When the prior two steps have been exhausted sometimes a creditor will sell your account to a junk debt buyer.You are now playing a whole new ball game.This is the most aggressive kind of collection there is, and I'll explain why.Let's say you have a friend or family member who owes you $100.00.You get sick of asking for the money back or it's just not worth your time.Now lets say you tell one of your other friends about this and he or she says. I'll collect it. Just tell him he owes it to me, and I'll even give you $7.00 for it.You didn't get your $100.00 but you made $7.00 back. Now lets say your friend collects $75.00.Thats a little more than 10 times his money back.Now imagine he gave you .03 for it and got $75.00 back. Junk debt buyers usually pay pennies per $100.00 of debt.Next post I will get more into detail on solutions to your problems with bill collectors and how to solve them.