Choosing A Collection Agency

August 9, 2023


I am not a lawyer, I am a judgment referral broker. This article is my opinion, based on my experience in California, and laws vary in each state. If you ever need legal advice or a strategy to use, you should contact a lawyer.

When you own a judgment, there is no guarantee you will be repaid anything. However, most people wish to try to get their money back. When you try, there are many choices, that range from trying to do it yourself, to which professional you will use, to attempt to recover some of what the debtor owes you.

Recovering judgment money is usually very time consuming and expensive. Be prepared to share a big portion of what is recovered with any company that helps to recover your money.

What factors should you consider, when choosing the right collection agency? The six factors to consider when picking a collection agency are their costs, location, contract, effectiveness, ownership policy, and customer service.

1) Costs: There are trade offs, with the costs of any recovery effort, or using any collection agency. Pure contingency, where you pay nothing, moves all the risks to the agency, and they must charge more. When the contingency fee is reduced, the fees you must pay usually increases. When you pay a bigger share to get your judgment or debt recovered, there should not be any extra up front, or other fees.

When the judgment and the debtor’s available assets are large, you may be able to negotiate a better rate, however this is rare because most judgment debtors do not hold onto money very long.

2) Location: It always increases the odds for recovery when the collector is close to the debtor or their assets. The best collection agencies have private investigators and lawyers in every state, in case the debtor moves.

3) Contract: The best contracts are not too long, in large type, and are written to be easy to understand, with terms and costs clearly explained.

4) Effectiveness: The old school collection agencies usually used only the primary tactics of nagging debtors into paying. Every collection agency starts by calling and writing letters to the debtor, then usually puts the debt on the debtor’s credit report. Some stop there, and do very little more. The best collection agencies begin with the same methods, and then use private investigators to find debtor assets, and their lawyers, to levy the debtor’s assets to get you paid.

5) Ownership Policy: The best collection agencies let you retain ownership of your judgment or debt. The best will admit when they cannot make any more progress, and inform you of that in writing. The good news is you always own your judgment or debt. The bad news is, if a good company cannot recover any money, who can?

6) Customer Service: The best people and companies rarely flake out. One drawback of a sole proprietor is if they get sick, busy, or detained, they may not be able to respond in a timely manner. It seems medium-sized businesses are best, because when a company gets too big, sometimes one hand does not know what the other hand is doing.

Judgment brokers know the best collection agencies nationwide, and can save you a lot of time by finding the best collection expert for you.

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