Debt collection agency - what do THEY pay?

Voyager2002

Tribulation wrote: »

You'd think that when people are in this sort of situation, it makes sense for the banks etc to try to help them? If a bank etc is prepared to write off about 80% of the debt by selling it, surely it would make more sense for them to freeze around 80% of the debt and just let person in difficulty concentrate on the remaining 20% until that person is back in employment?

I experienced something similar a decade ago. I had impossibly large debts to two banks (via their credit cards). One of the banks mainly attracts fairly affluent customers and prides itself on giving good service to demanding clients. The other attracts most of its business from the less well-off.

So, the first bank was unable to accept reduced payments, and as soon as it became clear that I was not going to make the minimum payments it required my debt went to an agency. The other bank was all geared up with collections people trained to ask the right questions, set payment levels and chase defaults, etc, and so handled the matter themselves.

In the first case, I was thankful that I was dealing with an agency, since they knew nothing about me apart from my name and address and the amount I owed. The bank had known a great deal about my life, assets, job-prospects and so forth. In both cases, once I provided evidence that I was living on state benefits they were helpful about setting token payments, freezing interest, and so forth.

After about six months I began negotiating a figure for full and final settlement. I think I began by offereing about twenty per cent of the amount outstanding, and eventually settled for less than thirty per cent.