How Can I Get Into the Debt and Judgment Collection Business?

If you want to get into the debt and judgment collection business, it helps to have debt collection experience. Sometimes you need to make phone calls and send out letters to past-due debtors. You should also be familiar with the Fair Debt Collection Practices Act, put into place to govern the debt collection activities of third-party debt collectors (collection agencies). You also need access to attorneys familiar with debt collection and litigation.

Instructions

1

Read about the state laws and regulations in the state where you will start your business. This process will help you find out what legal requirements you should meet. Every state has it own requirements regarding licenses and permits you will require in order to do business.

2

Purchase the necessary software that allows you to report individual debtor's accounts to the credit-reporting agencies. When you can report an account as past due it helps serve as a collection tool. Some debtors will offer to pay their debt in full if bad credit can be removed from their credit file.

3

Set up an office or work from your home. Many small business owners will work from their home when they get started. This cuts down on many expenses including overhead. As business picks up and you begin to make a profit, you should consider getting your own office.

4

Develop business by advertising and making sales calls. You should visit banks, mortgage companies, car dealerships, credit card companies and doctor's offices. Let them know you are in the business of debt collection and filing judgments. Prepare some business cards, brochures and a website to help promote your services. Also write articles about debt collection and submit them to free electronic newsletters (ezines).

5

Hire a judgment or litigation attorney. Your attorney will send out correspondence to past-due debtors and make phone calls. He should also be adept at going to court and getting judgments. Once a judgment is received, an attorney needs to know how to locate and go after assets such as bank accounts, garnish wages, and attach liens to property such as homes and cars.

6

Get a network of attorneys. If you plan to do business in more than one state, you need attorneys to represent you in every state. Usually an attorney is only familiar with the rules and laws in a particular state.