Debt collectors are a tenacious lot. Most debt collectors are hired not according to a flat fee, but on commission: for every dollar that the debt collector collects for his client, the debt collector gets to keep a portion. This gives him a powerful incentive to collect, for which he mobilizes a number of different tactics.
Calling
One of the simplest and most effective means of collecting a debt is to call the person who owes the money. And then call her again. And again. And again. Debt collectors must follow a number of rules, outlined in federal law, when calling. They cannot call during inconvenient hours (9 p.m. to 8 a.m.), make false statements, or use abusive language. However, a collector can continue to call and politely remind the person that he owes money.
Garnishing Wages
Wage garnishment is a process in which an employer withholds money from an employee's paycheck and turns it over to a creditor. To initiate a wage garnishment, a creditor must seek the sum in court. If the judge hearing the case sides with the creditor, he can order the debtor to pay the money. If he does not, the judge can order the money garnished from his paycheck.
Repossession
When a person has borrowed money to purchase an object, that object often acts as a form of collateral on the debt. If the debtor falls behind on his payments, the creditor may attempt to make up for the loss by repossessing the object. Repossession, unlike wage garnishment, does generally not need to be ordered by a court. However, the creditor must usually notify the debtor that repossession is imminent before proceeding.
Foreclosure
Foreclosure is a specialized form of repossession that is used when a person defaults on a mortgage. The process by which a home can be foreclosed upon is complicated and varies from state to state, lasting anywhere from several weeks to more than six months. In most cases, the debtor will be given the chance to make good on the money he owes before the home is seized.
Freezing Accounts
When a debtor owes a significant amount of money and refuses to pay, a creditor may petition a judge to freeze the debtor's bank account. This freeze will prevent the account holder from accessing all or a portion of the funds in the account. In some cases, the creditor may take further action and have funds actively removed from the account. However, occasionally, freezing the account is enough to compel the debtor to pay.
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