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| Your Personal Finance Magazine | Finances ~ Banking ~ Investing ~ Financing ~ Credit Cards ~ Insurance | |
| You are here: Home: Financing: Creditors and collection agencies | Thursday ~ October 10 ~ 2024 |  |
| Category: Financing |
Creditors and collection agenciesCreditors are lenders who extend a line of credit ... |
When you don't abide by the terms you agreed to, they will often report this to credit bureaus. If you don't pay your creditors back at all, your account will usually be turned over to a collection agency. A third-party collection agency is more common. They are a separate, outside company. Outside collection agencies will either contract with the original creditor to get a percentage of whatever they collect from you or they will buy your debt from the original creditor for much less than what you owe. Anything they collect from you above that price is profit for the collection company. Because collection agencies usually only get paid if they can get you to pay your debt, they tend to be more aggressive than the original creditor. For this reason, they have a reputation as being bullies toward the debtors. If you still don't pay your debt, the collection agency may file a lawsuit against you with collection attorneys. From: Understanding credit and credit cards (don) |
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