Why is a different company now calling on my accounts?

Once someone has fallen behind on their payments the obligation begins to take on a whole new life. As the old saying goes “one man’s garbage is another man’s treasure”, so too is your past due obligations. There is an entire industry which solely focuses on bad debt and the collection of these amounts due.

First there is what is called the pre-charge off stage.  At this point your debt is still with the original creditor and they will make attempts to collect the debt through various means. This stage is only 90 to 120 days in the life of a past due obligation. After this stage the bad credit card  debt is many times placed with an outside firm to assist in collecting the past due debt.  This 1^st placement is what triggers a different company to begin calling and harassing you to pay your past due credit card bill.

This 1^st placement can last anywhere from 90 to 120 days depending on the agreement between the companies.  Generally the first placement is not your ideal time to settle an outstanding credit card bill.  The collection firm is generally acting on behalf of the original credit agency and with this they must be able to make a profit which adds cost to the collection process.  A good rule of thumb is approximately 30% of your original credit card balance will be paid to the agency as compensation for their efforts.  This 30% means most likely you will receive offers to settle above 60% and many times as high as 80% of the original balance due.

Now let’ assume the first placement was not successful and they did not collect the past due account. At this point the original creditor can usually take one of two possible avenues to collect your debit. They can place the past due account with another agency or they can sell the bad debit and they are effectively done with the account.  Placing the past due account with a 2^nd firm is referred to as the 2^nd placement and the compensation numbers change as the debt is now several months old.

Another option for the original creditor is to sell the past due account to a debt buyer. This means the original creditor no longer holds any rights to this account and the agency whish purchased your account now controls how they will proceed. When an past due account is sold to a debt buyer it is generally sold for pennies on the dollar, anywhere from 6 cent to 20 cents depending on the type of debt, the balance due a tape or snap shot of the debtor. The known facts concern the person who owes the outstanding bill and the frequency of contact with this person.

 

This process can then be repeated several times, debt can and is sold several times in attempts to collect on the account. Conversely ones debt can be placed several times as well all depending the decision taken early in the collection process. Each step along the way offers both a collector and the debtor opportunity to settle their accounts many times for pennies on the dollar if ones patience and understands the process.