Debt recovery services have evolved through the years into an important tool for debt management. As more people accumulated debt in the wake of the internet, companies offering to help with the repayment process were very few and far between. Now, more than ever, consumers are actively seeking out these services to help recover past due invoices and consolidate loans. While debt collection agencies were once considered an effective way to collect outstanding bills, today, many feel that this option has gone too far and is no longer appropriate for most situations. While many reputable and trustworthy debt recovery agencies can help with debt recovery, many will only put the debtor through more trouble.
When looking for a debt recovery service, consumers should ask for the following three things. Proof that the debt collection agency is licensed in the state in which they do business. Likewise, the service should show proof that the debt recovery agency is experienced in dealing with accounts receivable collections and proof that the debt recovery agency offers a full array of services other than just accounts receivable collections.
After obtaining these three things from the debt recovery service, the consumer should ensure that the debt management plan is not considered a loan. Simply put, when a consumer contacts a debt collection agency to work on a debt management plan, they are attempting to refinance or obtain a home equity line of credit, which carries its own set of risks and benefits. Therefore, it is essential to have a debt recovery service specifically to provide a debt management plan.
Often, debt recovery agencies that are aggressive, overbearing, and not timely in their contact with creditors can cause more harm than good for the debtor. When a debtor feels that they have been treated in a manner contrary to the law, they are likely to seek legal recourse. When a debtor has bad debt collection services and cannot pay those debts, the courts can force the creditor to pay. However, many creditors are not willing to make such payments. Instead, they attempt to take the money through legal means. A debtor who is forced to deal with bad debts can face the possibility of a lawsuit as a result.
As a debtor, you need to be aware of any debt collection practices that may be taken against you. When you encounter a problematic debt collection agency, it is always best to speak with the Better Business Bureau (BBB) before doing business with that agency.