How do debt collection agencies work?

Notgotapottoweein

Hi

I'm probably being a div buts what new:D .

I'm assuming a creditor will sell the debt you owe them to a debt collection agency.

The debt collection agency must then go through the courts to get the monies/goods they are owed?

Can a debt collection agency turn up on your doorstep for a debt without going through the courts first.

How long does the process ( from the DCA buying the debt until they actually recover the debt ) last?

This may be obvious to some but not to me so some clarification would be most helpful.

Thanks

Ps my wife scarlett 1974 obviously aquired the brains good job i got the looks eh!

Richard_S

Hi Notgot,

An outstanding account can be sold to a debt collection agency but their powers are extrmely limited; see here:

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/ManagingDebt/DebtsAndArrears/DG_10034289

If they decide to take court action then bailiffs can be instructed, but not if you successfully defend the County Court Summons. Even if you lose it, by not defending it, then they still have to get a Warrant of Execution.

Nothing will happen very quickly, and I can't see how they can commence Court action until they know what the deficit is, and they won't know that until they've collected the car.

Richard

Notgotapottoweein

Thanks again Richard

What i don't get though is how this debt collection business can be profitable.

So far at least four of my not inconsiderable debts are with DCA's but not one of them are going to see a penny from me.

Thats at least £40k they are out of pocket before they start.

How do they make any money?

Broken_hearted

Oh I thought they worked by phoning 20 times a day, bullying, lying making threats and driving people to despair. Maybe thats just Crapquest.

Broken_hearted

Notgotapottoweein wrote: »

Thanks again Richard

What i don't get though is how this debt collection business can be profitable.

So far at least four of my not inconsiderable debts are with DCA's but not one of them are going to see a penny from me.

Thats at least £40k they are out of pocket before they start.

How do they make any money?

They make money from those who do pay that don't take the easy way out.

Notgotapottoweein

Broken_hearted wrote: »

They make money from those who do pay that don't take the easy way out.

Hi Broken hearted

I don't believe we have had the pleasure.

I take it you are not a bankrupt then?

Depends on your definition of easy doesn't it i suppose.

Like watching your wife in floods of tears every night?

Like watching half your family get themselves so upset that they are verging on a breakdown?

Like removing your children from the security of the family home?

Like not knowing where you are going to be living in 6 months time?

Its been a breeze love an absolute breeze:rolleyes:

MammaCas

Notgotapottoweein wrote: »

Hi Broken hearted

I don't believe we have had the pleasure.

I take it you are not a bankrupt then?

Depends on your definition of easy doesn't it i suppose.

Like watching your wife in floods of tears every night?

Like watching half your family get themselves so upset that they are verging on a breakdown?

Like removing your children from the security of the family home?

Like not knowing where you are going to be living in 6 months time?

Its been a breeze love an absolute breeze:rolleyes:

And I'm sure that's only half of it. No easy option, the only option.

Broken_hearted

Notgotapottoweein wrote: »

Hi Broken hearted

I don't believe we have had the pleasure.

I take it you are not a bankrupt then?

Depends on your definition of easy doesn't it i suppose.

Like watching your wife in floods of tears every night?

Like watching half your family get themselves so upset that they are verging on a breakdown?



Its been a breeze love an absolute breeze:rolleyes:

Been there done that and yes it would be easier for us to go BR. The question was how DCAs make money.

Notgotapottoweein

Indeed it was i just found your reply somewhat spikey.

Its almost as if you were saying people who go through bankruptcy are taking the easy path.

But i'm sure i misunderstood

Scarlett.1974

Broken_hearted wrote: »

Been there done that and yes it would be easier for us to go BR. The question was how DCAs make money.

And your reply was a 'dig' pure and simple. Please don't insult anyone's intelligence by pretending otherwise.

PayPeanuts_2

Most debt collection agencies make their money buy buying debts at a cut price from a bank or building society or other DCA and then collecting on them. As they buy them at a reduced price they are able to make a profit. From the banks perspective it is better to get some money from a DCA than spend time and resources collecting.

It is a highly profitable business, mostly propped up by using questionable tactics.