Cedar financial review: The real strategy behind Debt Collection service companies
If you are reading this article, chances are you’ve recently been contacted by a debt collector company like cedar financial for a due bill and you don’t know how these companies really work. You probably have multiple questions in your mind, are understandably anxious about the overall process and might be searching for something like Cedar Financial Reviews online to get better idea on what’s going on! Well, that is the reason we are presenting you with this article.
The process of debt collection is easy but it is very uncommon to people. So, if this is your first encounter with a debt collection company and you are sweating over a pending ticket, this article will help you with a better idea of the overall perspective of these multinational debt collection agencies.
Let’s start with the basics first:
What is a debt collector?
In the simpler terms, debt collectors are the companies responsible for collecting unpaid debts for others. In most of the cases, these companies work for a third party to collect an outstanding balance. If you have missed several payments, the original source company sells your unpaid bills to these third party debt collection companies. Now it it is the responsibility of these companies to get in touch with you. Generally, it is easier and more cost-effective to hire these debt collectors than to spend your own resources in the collection of your negligent accounts.
Well, the policies of sending these accounts to collections differ depending upon different creditors and lenders. Reviewing their terms and conditions will pretty much save you from an unpaid bill. If we talk about credit card accounts, they are sent to the collectors after a deadline of 180 days or in case of non-payment while other type of businesses may send accounts to collections after just a month or two of missed payments.
The business of Debt Collection:
As we mentioned before, debt collectors mostly work for third party organizations of all types such as credit card debt, medical debt, automobile loan debt, personal loan debt, business debt, student loan debt or even an unpaid loan debt. Typically, a creditor pays a substantial percentage of around 25% to 45% of the amount collected to the debt collectors. The collection agencies are supposed to specialize in types of debt. For example, an agency might only be able to collect a pending amount of at least $200 that are less than 2 years old.
Among the many other types of unpaid bills, there are also some debts that are not easy to re-collect. For them, the collection agencies can also negotiate settlements with the consumers for an amount that is less that what the consumer actually owes. The Debt collectors can also take legal actions against the consumers who are not ready to pay or refused to pay the collection agency.
How Debt collectors buy packages?
Once the creditor decides and wants to sell his debts to a third party agency, the creditor cuts its losses and sells the pending debts to a debt buyer. The creditor makes a package of numerous accounts having similar features and present them as a group. Debt collectors can then choose a suitable package out of them. A debt collector can choose a package that is not too old, and not handled by some other debt collector.
Debt collectors like Cedar Financial buy these packages through a bidding process. There is only one tip for buyers, the older the debt, the less it costs, since it is a lot less likely to be collectible. The bidding price is much influenced by the type of debt, says Amir Erez from Cedar Financial . For example a mortgage debt costs more than a usual utility debt.
In few cases, debt buyers keep everything they collect because they have already purchased the debt from creditor. But in general debt collector get paid when they recover a delinquent debt, the more they recover, the more they earn.
What Debt Collectors do?
Phone calls and letters are the simplest ways to contact borrowers and request them to re-pay the pending debt. When a consumer is not approachable by the contact information provided by the original creditor then collectors dig deeper to reach them using a computer software or in some worse cases, they even go for some private investigations. Debt collectors can also conduct searches for a debtor’s assets such as bank accounts and brokerage accounts to find out his ability to repay. These middle men can also report a debtor’s delinquent debts to credit bureaus and for consumers to pay since these kind of complaints can do serious damage to a consumer’s credit score.
The debt collectors can only accept payment from the debtor himself, they can not take a paycheck or reach into a consumers bank account even when the account numbers are known. If the debtor doesn't agree to the payment, then the debtor can take him to the court and have to win the judgement against him or her. The judgment will allow you to begin garnishing wages and bank accounts.
The Debt collectors can also contact delinquent borrowers who have already fought a case against them and have won it.
What is the process of reputable collectors?
The debt collectors are mostly known for their bad reputation of harassing consumers. One will find many complaints against debt collectors in the Federal Trade Commission than any other business. However, to keep them from being abusive and deceptive, The Fair Debt Collection Practices Act defines some rules based on which how collection agencies can collect a debt. And there are many reputable debt collectors including Cedar Financial who consider all these rules and are careful enough to not violate any of the mentioned laws. Also, you can check reviews of companies like Cedar Financial or Cedars Business Services to know more details.
A reputable debt collector is fair, respectful, honest and law-abiding. A consumer can always verify a debt request made by a collector in a written form request. Once a verification request is made by the consumer, the reputable collector put all the collection activities on hold and send consumer back a written notice of the amount pending, the company you owe it to and how to pay it. If in any case, the collector can’t verify the written request the company has no right to continue the debt collection. Collectors do also have certain time limits. A reputable debt collector is one who reports all the debts and do not hold a debt for long time say seven or more years. They responsibly send a debt validation letter within 5 days of first contact with debtor. They try to obtain accurate and complete records so that there is no future pending. If a consumer has requested that a particular debt was due to an identity theft, then they will make a reasonable effort to verify your claim. A reputable collector will never do anything to harass or threaten you or treat you differently based on your sex, age or other characteristics. They will keep everything in private and won’t publicize your for your pending debts. They also won’t contact you before 8:00 a.m. or after 9:00 p.m. without your permission to do so.
Checking reviews of companies like Cedar Financial or Cedars Business Services can really help you out. This way, you can be assured that you are contacted by only right people for right reasons.
Debt collection is a legitimate business so if in future a debt collector calls you, it’s not necessarily a beginning of an abusive relationship. These collectors are honest and they are also doing their job. They work with you to create a plan to help you repay your debt.