How does the Ca process begin

Twokid,

Let me share the knowledge that I have gathered from this forum. Hope it will help you :D

When a debtor fails to pay his bills or goes default, original creditor either tries to get the money back through their own collection department or assigns some third party collection agency to collect it on their behalf.

Then the collection agency contacts the person over phone or through correspondence and asks him to pay the debt. debt validation is the first step of debt collection. Collectors should provide the detailed history of the account. Collectors should also show the evidence that they have the right to collect this account.

Once the debtor starts paying, collection agency is supposed to pay the amount to the original creditor.

Now some agencies are there known as JDB, junk debt buyer. They buy port folios from original creditors or lenders. These port folios contain huge number of delinquent accounts. Once the original creditor sells these accounts to the debt buyer, the buyer becomes the owner of those accounts.

Sometimes debtors feel uncomfortable to deal with collection agencies and try to settle the account with original creditor. What I feel, the original creditors do not show any interest to settle those accounts that are sold to debt buyers.

However, once an account is taken back from the collection agency, I do not think the agency has the right to collect it any more. If they continue to collect it then either they are careless or they are intended to cheat people.

There are instances where original creditor has cancelled contract with collection agency. If the creditor or lender receives huge negative feedback on the collection agency they work with, or the agency does not pay them regularly, they assigns some other collector to work on their behalf.

That was all form my part. Let's see what the other members say :D

Thanks so much Bryan,that is the best explaination anyone could have given.Thanks for taking the time to anwser my question. :) My only other question would be,how do you know which kind of CA your account was given to?

Welcome Twokid :D

If you somehow manage to go to their website, or view their company profile, you can understand it. You could see the terms like ???debt purchaser' or ???debt seller'.

Once an account is reported as charge-off, original creditors are not likely to spend money for it. They consider it as bad debt, not collectable. So if you see a collection agency is intended to collect charge-off accounts, past SOL debts, this agency is supposed to be a debt buyer.

FYI, one agency can act as JDB and collection agency both. Hope this helps. Let's see if other members can give some more clues :D