They’ve been vilified in books and movies, but debt collectors perform an important job of getting the money owed to their clients. Although there are different types of debt collection agencies, they all generally work in the same way. Total Debt Freedom looks at what debt collection agencies do.
Your unpaid bills do not go to a debt collection agency until about three to six months after the company you owe money to tries to get you to pay. Debt collectors will say that they are working for the company you owe money to, even though they really work for a debt collection agency.
In all of their written correspondence with you, they will note that they are from a debt collection agency.
Some debt collection agencies are allowed to see if you can pay most of the debt, so at least their clients get something. This does not happen often, but it never hurts to ask a debt collector if a negotiation can be reached.
Debt collectors can be relentless in their letters and phone calls because they receive a fee if you pay up. The company that hired them pays the debt collector up to half of what you owe. Debt collection agencies are allowed to give your case to a lawyer if you still refuse to pay.