The Debt Collection Process: What to Expect from the Process

There are two aspects of the debt collection process. There’s the creditor-process and the debtor-process – depending on the “point of view” of the party involved in the process. Both sides should not only be aware of the process that directly affects them, but they should also be aware of the process concerning the other side.
Various state and federal laws govern much of the creditor process. The primary federal law governing debt collection practices is the Fair Debt Collection Practices Act. Reputable debt collection agencies will follow the rules provided by this law. The government can severely penalize any collection agencies who fail to follow the codes specified by this Act.

State laws primarily govern items such as timelines where the debt collection agency is allowed to perform such actions as take the debtor to court, etc. Likewise, state laws might govern certain practices pertaining to contacting the debtor. For example, some states don’t allow the collection agency to contact anyone except for the specific person owing the debt. This means if that person’s spouse answers the phone, the agency can’t tell the spouse what the call is about.

Generally, though, the debt collection process first involves information collection. The collection agency needs to know as much as possible about the debtor, the debt, how it was incurred, what the debtor and creditor agreed to, what has transpired since the debt has gone delinquent, and any other pertinent information.
Once the collection agency has gathered this important information, the agency will formulate an appropriate plan. The plan will likely depend upon information gathered -- has the debtor been cooperative in the past or have they been difficult to contact or deal with, and so forth.

From this point on, the collection process is almost entirely in the hands of the collection agency. They can proceed as their business practices dictate up to and including filing a lawsuit against the debtor to finally recover what they can of the debt.

For the debtor, the process is one where the debtor is on the receiving end of the initial communications. Depending on how the debtor responds to the collection process, the debtor may also be involved in initiation communications with the agency or creditor.

During the collection process, the debtor can expect to be contacted by the collection agency by either mail or phone. The letters sent are usually form letters explaining what the communication is about and providing information for the debtor to contact the agency and also ensure the information the agency has is correct.
Phone calls may or may not be scripted, depending on the agency and the experience level of the phone personnel. The caller will usually begin with an introduction and attempt to draw the debtor into a discussion concerning the debt in question. Once the caller establishes a rapport with the debtor, they will discuss repayment. Depending on the collection agency and how they do business, the caller may also discuss additional repayment options available to the debtor. Collection agency phone callers are generally trained to deal with the various responses the debtor may give them, so there are many possible paths the phone conversation may travel down.

Finally, the collection process may end up with the debtor being served a Summons and Complaint which begins the legal lawsuit process. Once this process begins, the agency is much more likely to recover some or all of the debt.

Regardless of the exact path the debt collection process may take, the overall goal is to collect on a delinquent debt. This process provides for a reliable method by which collection agencies are able to reliably recover a significant portion owed.