Debt Collection Agencies

Debt Collection Agency

Debt collection is the procedure of chasing payments of outstanding debts owed either by people or businesses. A collection agency is also referred to as debt collector or an agency which specializes in debt collection. Collection agencies are allowed to use aggressive and unethical tactics in trying to collect outstanding debts, such as; false claims to have already paid, harassment, humiliation, threats and physical violence.

A debt collection agency | First Capital might lose their license if they are found to be abusing their rights as well as violating consumer protection statutes. Most collections are time-barred; this means that once the creditor sends the debt back to the agency, it cannot contact them anymore for a certain period of time, called the “cooling off period”. Some collections can still continue to work even after the “cooling off period”, but the debt cannot be paid with any funds obtained from that sale. Debt collection agencies have to obtain court approval to continue collections, and they can be required to pay an attorney’s fees to the courts along with a portion of the money they have collected.


In some cases, collections are done through companies which do not actually buy the outstanding debt directly from the original creditor, but rather, the companies send the money to these collection agencies who buy the debt for pennies on the dollar, after first processing all the necessary paperwork. Debt buyers can also take longer to pay than the original creditor did to the debtor. Debt buyers can use a variety of strategies to pressure creditors to settle debts faster and to make the original creditors agree to settlements that might be unfavorable to the defendant (debtor). Some debt buyers will use the threat of reporting the delinquent accounts to the credit bureaus. If the creditor agrees to settlements, then the debt buyer can file to have the account deleted from one’s credit report, which will severely damage the credit scores of individuals who have bad credit or no credit.

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