USA Collection Agencies

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USA Collection Agencies

When looking for debt collection solutions for a large business, many people look at nationwide or worldwide debt management services within the USA. Collection agencies that are well equipped to deal with debtors in numerous states would be an advantage for businesses with a large client base. This is because such agencies would have knowledge of the differences between individual state laws.

All USA collection agencies are regulated at individual state level. In most states it is required that debt collection agencies are bonded and/or licensed. The United States Federal law regulates debt collection practices through the Fair Debt Collection Practices Act. All agencies must adhere to this act.

According to the act, debtors must be treated fairly by debt collectors. USA collection agencies may not threaten, harass or coerce debtors by use of violence. Any debt collection agency that uses an abusive practice when recovering debt may be subject to a lawsuit. Non-compliance of the act by an agency could also result in the agency being closed down.

While debtors are protected by the law in the way they are treated, this still does not make them exempt from paying the legitimate debt that they owe. Debt collection agencies can also use the legal system to aid them in carrying out their task. Most USA collection agencies hire attorneys who are highly experienced in debt collection lawsuits. The collection agency can then go about suing the debtor. In some cases, the fact there is a lawsuit against the debtor is enough to scare the person into paying.

Once the debtor is served with the court documents he/she then has a limited time in which to respond. The type of response required is determined by the state law where the debtor resides in the USA. Collection agencies that do not limit their work to one particular state will be able to carry out this process throughout the country. The agency is empowered to take action against the debtor once the agency’s attorney obtains a judgment.

In most cases this is by means of garnishing the debtor’s wages. A garnishment order requires that the debtor’s employer deduct a certain amount from his/her paycheck before it is paid out. This cannot be more than 25 percent of disposable income, according to federal law in the USA. Collection agencies then get the money after it is forwarded to the court. Depending on the state in which the debtor lives, additional restrictions may also apply.

Another way in which a debt can be recovered by a collection agency is by executing a judgment against any assets that the debtor owns. This could be a motor vehicle, a property or a bank account. Certain restrictions may also apply depending on which state it is in the USA. Collection agencies then receive the proceeds after the asset is sold, minus any fees. If there is any excess proceeds from the sale, they will then be returned to the debtor. It is important to ensure that the agency you choose is aware of the procedures that vary among states, more so if your client base is widespread.


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