What Is Debt Collection?

Debt collection is the approach of pursuing payments of debts owed by different entities (individuals or businesses). It occurs when a collection agency or a company attempts to collect past-due debts from borrowers. Hiring debt collectors are often a cost-effective alternative for businesses as it prevents you from investing your time and resources to manage your debts. Most industries, including medical offices, utilities, credit card companies, loan services, and phone companies, work with debt collectors. 

Remember- Debt collectors often include “debt buyers” who purchase past-due debts and attempt to collect on them. 

Hence, they are also known as third-party agencies that extend their services to collect debts on behalf of another company. Therefore, if an agency works for an original creditor, the creditor pays off the debt collector a specific percentage of the collected debt. 

How do debt collectors work?

Debt collection often varies depending on the agency that is collecting the debt. While some agencies only deal with a specific kind of debt (such as medical or student loan debt), others may deal with obligations that are gone old. Moreover, depending on your residency location, some other agencies may not deal with debts if it has already passed the statute of limitations. 

Collection agencies may assist you in collecting the old debts at the earliest if it has passed a couple of months and indefinitely after that. However, it depends on your chosen agency, its policies, how much you owe, and the type of debt. 

Therefore, if you have a past-due debt, your chosen collection agency will assist you in making notice alerts and phone calls. 

Debt collection agencies and debt collectors often use file information to contact your debtors. Such data can include current address, phone number, or your relatives’ contact information along with personal banking information such as savings and investments to determine their remaining debt amount. 

What is the process?

Most reputable debt collection agencies issue letters to your debtors with some specific details, including:

  • Creditor’s name.
  • The amount debtors owe (including late fees and other charges).
  • Capacity to dispute the debt in question, along with stipulations. 

A well-experienced and reputed debtor will always allow your debtors 30 days to dispute the debt in writing. However, if your debtors do not dispute the debt within 30 days, your chosen agency may consider the debt valid and continue to contact your debtors for debt collection. Hence, a good and reputable debt collection agency will always abide by the rules and regulations to carry out your debt collection smoothly and error-free. 

About us

Look no further than Taurus Collections (UK) Ltd if you need debt collection services for your business. We pride ourselves in following a simple, straight-talking approach to assist our clients on issues associated with debt recovery services. We strive to offer optimum customer satisfaction and one-stop service for dealing with your debtors. We have extensive services, including pre-legal visits, outsourced credit control, no win no fee debt recovery, UK & international credit checking, and business finance. You can also use our Late Payment Calculator to ascertain and verify your credit amounts.
Contact us at 0800 069 8777 or 01332 565 350 (Derby) or write to us at enquiries@tauruscollections.com for more information. Feel free to stay tuned on Facebook, Instagram, and Twitter.