Credit cards are a way of living in this era. From a salaried class person to an entrepreneur, everyone likes to take/buy things on loan and pay the amount in easy installments.
At one point, this might seem like a blessing, but failing to repay the amount on time might turn out to be a disaster.
If a person fails to repay the amount on their credit card/ loans on time and becomes a repeat offender, such debts are transferred to collections.
When a debt such as a credit card or a loan is unpaid over a specified period of time, a creditor (individual or a company) hires a third party, referred to as collection agencies to recover that amount. These agencies work for individuals as well as corporates.
What Is a Debt Collections Agency ?
Through these third-party collection agencies, a creditor tries to recover the credit or loan, which remains unpaid by an individual or a firm. These agencies have several ways of recovering the money from the borrower. From calling to sending letters, Debt Collections Agency does it all to get the money of the lender back.
What Happens When A Debt Is Sent To Collections?
- Calling: If you skip payments of your credit cards or loans, debt collectors start calling on your registered number or reference numbers mentioned on the documents you submitted while taking that loan. Over the phone, they ask you to pay the amount in a specified period of time.
- Sending Letters: Letters (payment notice) are sent to your registered address regarding the payment. The letters mention the latest time period by which you need to make the payment. These letters specify everything about your loan/ credit card, like your spendings, promise to pay, etc.
- Card Block: You run the risk of getting your cards (in case of default on credit card) or accounts (in case of loans) blocked. In case you ignore the phone calls and letters sent to you by the collectors, your card or loan account might get blocked.
- Personal Visit: If you don’t attend the calls, debt collectors might also end up at your doorstep to inquire about the default. The personal visit does not happen at an early stage, but if you keep ignoring the calls made by the collector, they might show up at your gate to talk about the default.
- Impact On Credit Score: Debt collectors also have the authority to report a defaulter’s account to credit bureaus, which impacts the borrower’s credit scores. Once a person’s credit score gets impacted, it becomes difficult for them to get any kind of loan in the near future.
- 6- Impact On Future Borrowing: Once an account gets reported to collectors, there are chances that the defaulter might have to pay a higher rate of interest for their loans in the future.
- 7- Legal Procedure: In case a borrower keeps ignoring the calls from a collection agent, the latter has many other ways to contact the former. A debt collector may file a legal case against the defaulter, who will later be contacted by an attorney regarding the unpaid debt. In such cases, a demand letter may be sent to the defaulter’s house, and at a later stage, the person may be asked to appear before the court.
Debt collection, these days, is considered a successful business idea. When society’s purchasing and spending power increases, it will show a direct impact on people’s borrowings as well. People will get more inclined towards credit cards and loans, as spending a big amount in one go might be a hurdle for many. In such a scenario, there are chances that people or organizations could default on the borrowings. This is where the collections agencies will come into action. The organizations and individuals will need people who can assure them of getting their money back.
First Capitol Collections is one such agency that takes care of the debt collection process from start to finish. It serves both individuals and commercial customers.
Every agency has different time periods within which they promise to get your money back. At First Capitol, we assure our customers to get back the money within three days.
With 30 plus years of experience, the company has reliable and highly professional personnel to get the work done. You can visit the company’s site for all your queries. You can contact us at 03333444991.