To become a debt collector, you need to get specialized training and develop special skills (communication, problem-solving and others) to conduct effective debt collection. This process involves contacting people who have past due debts to a business or creditor. In addition, such experts help with repayment and develop plans of monthly payments to pay off the debt. There are special debt collection agencies, but such specialists can also work independently.
If you are curious about how exactly debt collectors work, want to delve into the peculiarities of this profession or even master it, then you should read our article. We have collected some useful tips, compiled a list of the necessary skills a debt collector should possess, and provided many other useful information in this material.
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A debt collector is a professional who works on behalf of a creditor to recover delinquent debt. The main duty of a debt collector is to deal with people who owe money on credit cards, utility bills, personal loans, medical bills and other financial obligations. Debt collectors earn a percentage of the debt if they pay the day back to the lender. Companies may hire specialized debt collection agencies if they accumulate a lot of outstanding payments from their customers.
While collecting a debt, you must spend a lot of time communicating with debtors by phone, e-mail or handwritten letters. Debt collectors work to convince the debtors to repay the debt as soon as possible. They can also conduct researches on debtors online to assess their ability to pay. If the debtors do not want to repay the unpaid debt, do not answer calls and ignore letters, the specialist should look for another way to convince them to do it.
Debt collection work involves performing the following daily duties:
If the debtor refuses to pay, debt collectors can file a court action to decide whether the debtor should be forced to pay the debt. Provided that the court authorizes legal action to collect the debt, the debt collector has full authority to contact the debtor’s bank and their employer to impose a levy on bank accounts or to withhold a certain amount from their wages to begin the collection process of the debts. Debt collectors can also seize property or force debtors to sell their assets.
Debt collection agencies contribute to the financial health of many companies and individuals. Collecting debts involves many tasks, including finding the debtor’s assets, such as brokerage and bank accounts.
In addition, debt collectors can report the stubborn debt to credit bureaus to encourage debtors to repay the money. Otherwise, the debt negatively affects a consumer’s credit rating. The credit score remains on your credit report for seven years from the date the original debt was first forgiven.
If retrieving money is not likely in a certain case, it is possible to resell the debt to a debt buyer. In this case, the larger the debt, the cheaper it costs.
Regardless of where exactly a debt collector will have to work, they still need to have the appropriate base to perform their duties effectively. The key to success is to undergo specialized training. It can be a college education or the completion of special courses. Having specialized training is always an advantage for employers.
If you are wondering how to become a debt collector, start with the right education. To get a job at a professional debt collection agency, employers often require candidates to have a degree in a relevant field. It could be:
Engaging in networking allows to gain useful knowledge and debt collector contacts that will be helpful in securing a job in the future. While earning a bachelor’s degree, you can learn a lot of finance information, and develop relevant skills that will be useful for debt buyers, collection agencies and any other employer, or when working independently. In addition, it doesn’t hurt to have a detailed understanding of negotiation tactics and strategies for creating debt repayment plans.
Attending courses unrelated to the chosen field of study is okay to get a comprehensive education. For instance, if you have decided to get a bachelor’s degree in business, it would be beneficial to take additional communication and computer programming courses to gain valuable experience that will help in effective debt collection process.
The Debt Collection Practices Act defines exactly how debt collectors should work. Fair debt collection practices prohibit using abusive, deceptive or unfair methods to collect a debt. If the conditions stipulated by the law are violated during the recovery of money, the debtor has the full right to file a complaint with the Consumer Financial Protection Bureau or even sue the third-party debt collector.
A debt collector may have special legal powers. Although, the following actions are prohibited:
In addition, the legal right also regulates the time limits of the limitation period and the period during which the collection agency or creditor has the full right to collect the debt by filing a debt collection action in court. The most common limitation periods are between 3 and 6 years.
Debt collection law is something that collection agencies are constantly confronted with. Studying the main legal powers of a debt collector and important acts and laws will help to cope with daily job duties efficiently, navigate the legality of specific processes, and interact competently with debtors.
The main way of communication with debtors is through phone calls. This is why one must follow ethical rules to establish a connection with the debtor, encouraging them to pay the debts.
Collection agencies are responsible for developing appropriate policies. Self-employed professionals should also study the legal framework to stay up to date with the latest news. It is also worth researching extra-legal authority to learn exactly what limits should never be exceeded.
Professional debt collectors must have a combination of soft and hard skills: well-developed communication skills and technical knowledge. It is necessary to understand that debt is a vulnerable situation for a person when they are unable to pay their bills due to certain circumstances. In this situation, it is essential to approach debt collection competently.
Advanced communication skills are a must for debt collectors. It includes negotiating to reach a compromise with a debtor, calculating a lump sum and developing a payment plan to recover money for the original creditor. Basic written and verbal communication skills will allow you to build relationships with creditors and debtors to handle your job responsibilities effectively.
Another useful skill would be the ability to resolve issues. It will enable you to establish contact with people who have debts. Debt collection is sometimes a complicated process, so it is necessary to determine the best way of negotiating with people to convince them to return the money owed back to the original creditor.
Debt collectors should show some persistence and keep in touch with their debtors until the original creditor receives the full amount. These specialists must devote themselves to getting the money back to the original creditor. That is why stamina and self-motivation will help a lot.
Relevant work experience is often required to get a job at a collection agency or other places. In this case, getting an internship with a professional debt collector can be a solution.
In addition, you can get some relevant experience if you work for a creditor, such as a loan officer in a bank. This opportunity will allow you to gain valuable experience in communicating with clients who want to borrow money, and learn a lot about the lending process. In the future, you can include this experience in your resume to demonstrate your value when applying for a job at a collection agency. It is also worth remembering to have relevant training.
Once you have completed your education in finance, business or accounting, and have gained relevant experience at an internship, you can search for open positions in specialized agencies that carry out job vacancies for you. Besides, you can always start your own business and work for yourself. The latter option requires additional thorough work to gain credibility and promote your services among creditors. A debt collector also has to learn many useful things during their work. You have to constantly acquire new skills and develop the existing ones.
If you want to apply for a job at a specialized debt collection agency, you should make a resume and submit it with a personal statement to show your level of qualification. As for the jobs themselves, you can find them on virtual job boards on the Internet, or you can contact local companies. If you managed to develop a professional network while still getting your degree, you can also tap into that.
