A collection agency is a company who specializes in collecting bad debts for their clients. The collection may work with collecting from individuals, companies, or both. They will use a mixture of letter, phone calls, and other means of communication to aid them in the collection process. The most common is a mixture of written letters and phone calls.
If necessary, the collection agency can perform credit checks, skip traces and other techniques. Skip tracing is a technique of finding information on a debtor, such as phone number or address, that will help collect the debt. This is often necessary if the debtor has refused contact from the company or moved. Credit reports can help ascertain the likeliness of the debtor paying the debt. A collection agency also has the ability to report to the major credit bureaus about the past due account.
Certain collection agencies will be able to handle collection on judgments. Corporate veil puncture will help find if the company is hiding assets. The collection agency might also be able to handle litigation if the debt is uncollectable. They may either forward it to an attorney, or have an in-house attorney who can handle the process.
