Do you know the difference in Original Creditors, Collections Agency(ies) and Junk Debt Buyers? Book Excerpt

I recently decided to write a book and here is an excerpt from my upcoming book, take a look let me know what you think.  This is just a rough draft.

The credit repair process can be a daunting task and before you anxiously decide to go pay an outstanding debt, that you have either notice on your credit report, or you may have received a letter in the mail.  It is important that you understand who are the key players and their role in the credit repair process.  It is important to know the difference between Original Creditors, Collection Agency(ies) and Junk Debt Buyer.

Definition of Original Creditor and the Collection Agency(ies):

Original Creditors are the credit card companies that issued you (the debtor) the credit card to make purchases.  For example those cards maybe American Express, Discover, VISA, Mastercard or department store cards (eg. Macys, Lord & Taylor, Sears etc.)

Collection Agency(ies) are companies that buy unpaid debts from Original Creditors.  These unpaid debts are charged off by the Original Creditor because the consumer has not paid on the debts for as long as 90-120 days.  This also includes attorney offices that collect on debts as well.

Junk Debt Buyer is another name for a collection agency these companies specialize in purchasing old collection accounts from credit card companies that are older than 120days old.  These debts may be auto loans, telecommunication accounts, or retail accounts.

These Junk Debt Buyers buy these accounts in bulk for pennies on the dollar, which is why they can offer the consumer discounts off their outstanding bill.  For example, if you have a charge off balance of $3,500 that was once owned by American Express the JDB will purchased that debt for .20 cents on the dollar which means the JDB paid only $700 dollars.  Now you see why collection companies can offer you a discount off of what you owed.

Here is a list of widely know JDB that may have called and harassed you:

  • Allied National/Interstate Risk Management Aternatives(RMA)
  • Asset Acceptance (AAC)
  • Asta Funding
  • CAMCO (Capital Acquisitions & Mgmt Co)
  • Cavalry Portfolio Services
  • Collins Financial Services
  • Encore Capital Group
  • Excalibur
  • First Select Corporation
  • JBC & Associates Arrow Fin. Svcs. RJM Acquisitions
  • NCO Group
  • Oliphant Financial Corp.
  • OSI Portfolio Services
  • Phoenix Asset Acceptance
  • Portfolio Recovery Assoc.
  • Pressler & Pressler
  • Sherman Acquisitions/Sherman Financial Group/Alegis
  • Unifund Group

Again it’s just a rough draft but there’s more to come.  Stay tune.

 

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