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How Does Debt Collection Work

Thousands of Americans currently suffer from overwhelming credit card debt. Many of those people also suffer from the harassment of debt collection calls. Dealing with these phone calls can be intimidating and stressful. That’s why it’s always good to familiarize yourself with the debt collection process.

One of the most frequent questions our clients ask us is how debt collection actually works. The following information will serve as an answer and introduction to debt collection and how these companies function, making the process a little less stressful.

What is Debt Collection?

Debt collection is the process of encouraging customers to repay an outstanding balance. Debt collectors work for agencies, although some can be independent workers or even attorneys. Most agencies act as middlemen. They collect the delinquent debt and pay them to the original creditor. Debt collectors contact delinquent borrowers via letters and phone calls in an attempt to convince them to repay their outstanding balance.

What Makes Debt Delinquent?

Any debts that are at least 60 days past due are turned over to collection agencies. Some agencies will specialize in specific types of debt. For instance, an agency could only collect debts of at least $200.

Do Debt Collectors Get Paid?

Debt collectors usually receive a substantial percentage of the amount collected, ranging from 25 percent to 45 percent. This means debt collectors get paid when they recover an outstanding debt. The more they recover for the creditor, the more they earn. This can attribute to some of the more persistent collectors.

How Can Debt Collectors Contact You?

Currently, more consumers report debt collectors to the Federal Trade Commission than any other industry. It is important to understand that debt collectors cannot harass you. They must not violate the consumer protection laws. A reputable collector will be fair, respectful and honest. But above all, he or she will follow the law.

Unsure of your rights? Keep reading to learn more about debt collection laws and consumer protection.

Learn More about Debt Collection

Debt Collection Laws

Creditor Harassment




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