June 25, 2014

The ABC’s of Debt Collection

The debt collection process can be a nerve-racking experience for many debtors. By the time a debt collection service is brought into the situation, the nerves of the debtor are frayed due to mounting bills and legal notices. This is wholly understandable that being in this situation is intimidating.

Debt collection just like any other business requires profits in order to stay in business. This is economics 101.

There are many tools available to debt collection companies that they can be deployed to achieve results, some innocuous and subtle and others are more aggressive.

A favored tactic currently being used by some companies in the industry is filing lawsuits against debtors.

This tactic has been proven effective in bringing boosting profits. In a relatively short period time from 2009-2012 income from legal collections rose from $582 million to over $1 billion in revenue.

Is Debt Collection Ethical?

This practice is perfectly legal and has proven results that are undeniable, but is it right? This is a question that we must ask ourselves.

Is this akin to kicking someone when they are down? Is there a better option than going through the debt collection process?

Debtors in the debt collection process are already in a tough spot. Throwing legal ligation at them seems counter productive to the stated goal of debt collection. Which is to collect past due payments quickly.

Making things more costly and acrimonious between parties does nothing but build more barriers to resolving the issue.

Escaping the Vicious Debt Cycle

There is a better way to getting out of the vicious cycle of debt. This process is called debt consolidation. This option has many advantages over going through the debt collection process. Debt consolidation allows you to combine all of your unsecured debt into one monthly payment.

This allows you to focus on making just one payment to us. We handle paying the creditors. This also reflects better on your credit report. It shows that you are trying to be responsible and pay down your debt.

People often think that bankruptcy or debt collection will give them a clean slate. Both avenues have long lasting affects on your long-term ability to find a job, buy or rent a home or buy a car. You will be penalized with higher interest rates or outright denial of credit.

With the stress of dealing with multiple creditors of the table, you can focus on financial and spiritual growth.  We measure our effectiveness through service, spiritual growth and Integrity.

Do you want to know more about debt and how you can make smart financial decisions now that will help you secure a more prosperous financial future? Sign up for our newsletter for monthly money tips.

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