How Commercial Debt Collection Works
In this article, we will talk about how commercial debt collection works. Collection agencies are a third party business that purchases the debt from the company who has money owed to them. Typically a debt collection company will purchase the debt from 25% to 45% of the original amount of the debt. Some collection representatives are attorneys and have the ability to take legal action against the person who owns money. Creditors hire these type of collection agencies when the payments are at least 60 days past due. The amount must be at least $200 for a collection agency to take the case.
The types of debts collected by this type of business include credit cards, personal loans, student loans, utilities, and even cell phone bills. Business debts are usually the ones handled by Commercial Debt Recovery. Something to keep in mind is the statute of limitations. This is the set of regulations set in place to govern the way the debt is collected and how much the collection agency can do to try to get the money from the person who owes it.
In conclusion, you should do a good bit of research on how this may affect you and your business. Rules and regulations vary from state to state and differ depending on situations. Also the older the debt is the less a debt buyer will pay for it so this means you can negotiate a lower amount with a debt that is older than newer. It is up to the debt collector to asses your assets or other variables whether or not you can pay and how much they will pursue you for. With this in mind, you should do your research and find a solution that works for you. Most collection agencies will work with you to find a plan to meet your needs.