Assigned debt is the bane of anyone who is being harassed by a collection agency. Creditors sometimes give debts to another party to collect. This is known as assigned debt.
Who Collects Debt
When a company trying to collect a debt has been unsuccessful, it contacts a collection agency that promises to use whatever legal methods it can to collect the money.
Commission
A commission is paid on the total amount collected on the group of accounts given to the agency. The more the agency is able to get, the more commission it makes, so it is in the agency's best interest to get as much from the accounts as possible.
Process
The original creditor agrees to take no further action on the debt and to leave it entirely in the hands of the collection agency. It promises that it is the legal owner of the debt that the collection agency is pursuing the issue on the company's behalf.
Terminology
The debt is called assigned because the debt is not sold to the collection agency. The money is still owed to the original creditor.
Ownership
The original creditor still owns the debt and will get the money paid on the account, minus the commission. The collection agency is simply acting as a contractor, even though the agency may try to convince people otherwise.
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