Before You Hire a Collection Agency You’d Be Best Served to Know What to Look For
If your business has a pile of unpaid debt that needs collecting you may be looking to hire a debt collection agency to help ease the burden and pick up cash flow. Collection agencies can call on massive levels of unpaid invoices in a small window of time, but before you hire a professional debt collector you should understand how to hire the right firm and what to look for in top vendor. For example one company might specialize in recovering medical debt while another is better suited for legal debts. Make sure you check out our publishers Top 10 Best Debt Collection Agencies at the bottom of this page, but first take a peek at this informative infographic offering 7 tips that will help you ask the right questions when interviewing a top rated collection and debt recovery company.
Here are some interesting facts about American Debt and the Collection agencies that Recover it:
- American Consumers Owe More Than $11.3 Trillion
- Over $55.1 Billion Dollars is Recovered by Debt Collectors Each Year
- The Largest Kind of Debt Collected is Medical (52%) followed by Credit Card / Financial Debt (20%).
- Utility Debt accounts for 7.5% Debt Collected. Student Loans Debts Total 5.7%.
- Average Credit Card Debt is $15,328
- 3rd Party Debt Collectors Donate Nearly $85 Million Each Year.
- Texas Leads in Largest Debt Recovery Followed by New York.
- Alaska Carries the Highest Average of Consumer Debt at $30,375.
If you’re considering interviewing a collection company to help you recover unpaid debt then take a look at our Top 10 review of Collection Companies, enjoy more tips, and compare rates by company.
How Much Percentage Do Debt Collection Companies Get Paid?
The answer to this question varies according to the age of the debt, so for example debt that is 6 months aged will cost you more than debt that is only 3 months old simply because the older the debt the less likely it is to pay. So a collection agency might get paid as much as 75% more on really outdated debt simply because the cost to recover it will be substantially greater. All companies charge differently and this is a critical question that should be addressed before making your final selection. A mere 5% could make the difference in your ROI from outsourcing or a decision to do the work in-house.
Author: Hudson Piccini
Hudson Cynar, a Harvard University alumna and the owner of three prosperous enterprises, is a distinguished business consultant, author, and writer. Her expertise spans multiple business sectors, with a particular emphasis on storage containers, commercial copiers, payroll services, and medical billing software. Dedicatedly investing thousands of hours into product and service research, Hudson crafts insightful reviews to guide entrepreneurs in making informed decisions for their businesses.