The concept of debt collection may sound scary to some, and may conjure images of overdue bills or massive credit card debt. That may happen sometimes, but the overall concept of debt collection is a fact of everyday life, and for the most part, it’s so mundane as to be invisible. Businesses collect debts for all sorts of purchases that their customers make for their products and services. What is more, businesses may collect debt from each other, and this may involve the wholesale purchase of items such as paper, machine lubricants, and much more. But the collection of debt doesn’t have to be done personally; rather, a receivable management collection agency can be used as a third party or middle-man for debt collection on any scale. Business debt collection services can do a lot of good and remove some of the logistical burden from their clients. To hire a collection agency, such as an Oregon collection agency in Portland, is to relieve a great burden on your own company. When is it time to hire a receivable management collection agency? And what sort of debts might that receivable management collection agency gather?
Americans and Debt
Overall, Americans have a lot of debt, but that’s not necessarily a bad thing. Many major purchases that Americans make, or services that they hire, involve the creation of debt. This, in turn, means that plenty of Americans are working with debt collection agencies and making regular contact with them. In 2017, for a fairly recent example, some 8,513 debt collection agencies were in operation in the United States. In that same year, about 70 million total Americans had a debt collection or were in regular contact with debt collection agencies within the past 12 months. And in the previous year, in 2016, debt collection agencies across the United States recovered around $87.5 billion in debt of all kinds. Statistics show that 29% of debt that agencies collect is paid within 90 days of the debt’s creation.
What are Americans paying debts to? A client company may hire a receivable management collection agency to collect debts of all sorts. Auto loan debts are practically a staple, as most Americans want or need to buy cars and can’t afford to buy their full price up front. A customer at a car dealership may work with on-site financing programs such as banks to get an auto loan for their new vehicle. The total American auto loan debt is staggering, but that’s not something to worry about. This is standard procedure, and Americans with good credit scores may enjoy low interest rates on those debts. Something similar may be done when a home buyer approaches a mortgage company to take out a loan on a new piece of property. The medical industry is also home to debt collection, since many medical procedures and services involve charging medical bills to patients. A patient may may a deductible out of pocket, and then their health insurance may pay the rest. Finally, many young adults may take out student loans to finance their college education and pay for whatever costs their scholarships don’t cover.
Customers and Cards
Another major source of debt is the purchase of items at stores or through online catalogs, but this may work somewhat differently. For the most part, purchases made at a store generate debt that is paid right away. Someone who buys power tools at the hardware store, for example, may have their items rung up at the register, and a debt appears. That debt may be fully paid in the same minute of its creation, often with credit or debit cards or sometimes with cash. Grocery stores, department stores, jewelers, and many other stores will do much the same. Meanwhile, online catalogs allow the shopper to enter credit card or debit card information to make a payment remotely, and a good catalog will have all the right software to make this process safe and smooth. In fact, debt collection may be handled by a third party that doesn’t require credit card information, such as PayPal and the like. Such agencies allow users to connect bank accounts to their PayPal account and make payments using that method instead.