Marikina, Philippines (PressExposure) April 26, 2008 -- A collection agency is a business that pursues payments on debts owed by individuals or businesses. Most collection agencies operate as agents of creditors and collect debts for a fee or percentage of the total amount owed.
Some agencies sometimes referred to as "debt buyers", purchase debts from creditors for a fraction of the value of the debt and pursue the debtor for the full balance. Creditors typically send debts to a collection agency in order to remove them from their accounts receivable records; the difference between the amount collected and the full value of the debt is then written off as a loss.
In many countries, collection agencies are governed by laws that prohibit certain abusive practices. Failure to adhere to such laws may result in lawsuits or government regulatory actions.
Most collection agencies in the United States hire outside collection lawyers. These collection attorneys frequently have considerable experience in debt collection lawsuits. Visit the North Carolina collection lawyer for this kind of legal action.
First, the lawsuit is filed with the court. Then, the debtor must be notified of the lawsuit by having the court documents served upon him or her, usually in person. The person presenting the documents to the debtor is usually a process server and usually works for a separate process service company, to avoid allegations that service was not done correctly. Check out the North Carolina collection lawyer for more details about this.
Once the debtor is served, he or she must take some action to respond to the lawsuit, though the specific type of response depends on individual state law. If there is no response, the collection attorney will usually request that the court grant a default. Check out the North Carolina collection lawyer for more details about this.
Once the collection agency's attorney has obtained judgment, he is empowered to take action to obtain the money from the debtor. A number of options are open, depending on the state the debtor is in and the status of the debtor's employment and assets. Check out the North Carolina collection lawyer for more details about this.
Specific laws and procedures can vary considerably from state to state. Most states have Statute of Limitations laws that limit the length of time from the commencement of delinquency in which a collection agency can file suit. For more details, visit the North Carolina collection lawyer.