Debt Consolidation Credit Counseling In Phoenix

One of the major benefits to working with a collection agency is that you only pay a fee if they successfully collect on the file you give them. This means if they can't collect your money, you don't pay a dime.

Notwithstanding, this isn't always the case. If you have a few smaller debts ranging form $10 - $500 each, the collection agency could require a fixed fee to handle those small accounts to make it profitable for them.

A Collection agency earns its money by taking a small percentage of the money they successfully collect. This percentage can range from 10% to 50% with the most common percentage being between 25% and 40%.

The amount the agency keeps is typically based on the age and the dollar amount of the claim. The older the debt the more difficult it is to collect and the agency will require a much higher fee to go after that debt. You should factor in how difficult it will be to collect. Certain debts are riskier to collect and therefore require a higher the percentage.

You could be responsible for some other charges related to their collection efforts including fee-based background checks, court costs, filing fees, and long-distance phone calls.

Before a collection agent works on a single claim, they will write up a contract that details the terms of your working arrangement including their responsibilities, the fees, any additional expenses, and customer service policies.

As with any contract make sure you read it over carefully for any fine print or contract language that seems confusing. If you notice discrepancies in the contract, make sure the agency fixes the problems immediately before asking you to sign it.