Bill Collectors: Part I - Who Are They?

If you've had any problems paying your bills, then you've no doubt heard of the term "bill collector" -- and no doubt you've dealt with them. They called your homes, sent you letters, and perhaps even knocked on your door a few times. They could be a scary group, especially since we don't know what they can and cannot do.

If you read my novel, The Bill Collector's Story, you would definitely get an idea of what they are and what they can do legally. But if you haven't read the book yet, then here's the low-down on what type of people bill collectors are, what they can do, and if we should be scared of them.

The term "bill collector" is actually a generic term describing anybody who is responsible for making sure a bill or debt is paid. A person who is a bill collector would not describe himself as such, but instead he would tell you that he is an account manager, which is what they are. They have a list of people that they keep an eye on and they check that list daily to see who's paying their bills on time, who's being late on their bills, and who's just not paying period.

These account managers work for a variety of companies: credit card companies, banks, rent-to-own stores, car rental places, power companies, IRS, etc. Their main job is to make sure that customers keep current on their bills. If anyone is late on his or her bill, then the account manager would get in contact with the customer to remind him or her to pay the bill. If a customer complies, then that's that. If the customer is continuously late or just refuses to pay the bill, then the account manager has to take higher measures to resolve the matter.

The "bill collectors" that we're most familiar with, besides the IRS, are those who work for credit card companies and banks. If we owe money to either of these groups, then they are known as "creditors." If you're dealing with a creditor, then you're dealing directly with the folks you owe money to. If you don't pay your bills with these people, then their account managers would begin a series of phone calls (usually three or more a day, depending on how desperate they are) and sending letters. They would do this everyday until the issue is resolved.

After a month or so of not paying your bills, your creditors would start getting very anxious, sending more serious letters, threatening to put bad marks on your credit (which has already been done if you've been late), threatening to send your account to collections, and even threatening to sue (which isn't a route many creditors are willing to take).

If they didn't scare you into paying your bills yet, then they would involve a third party agency, also known as a collection agency. This agency's account managers would then go after you with the phone calls and letters. They would usually try to get the full amount that you owe instead of accepting any monthly payment plans. If they managed to get the full amount from you, then the creditor who hired them would give them commission money for their services.

If the collection agency couldn't make you pay up, then the creditors would have a few options to go with if you hadn't paid up before 180 days of delinquency. They could take you to court, write off your debt and accept a loss, or sell your debt to a collection agency. Unless your creditor is a small, independently own company (that is, not a chain), then suing would most likely be out of the question unless you owe an insane amount of money that they just can't simply let go of. So, most likely, your creditors would either accept a loss and forget about you or sell your debt so they could get some money back. More than likely, they will sell your debt to a collection agency. A collection agency's job is simply to collect money, so they are not considered "creditors."

Once they sell your debt to a collection agency, the account managers would continue the same collection tactics such as the phone calls and the letters. Since they didn't pay much to buy your debt, they would be willing to negotiate a lower settlement. So, if you owe $4,000, your account manager might be happy with $1,000, or even lower. These types of account managers are paid on commission, so the more they could get from you, the better. But if they could get what's secord or third best, they'll accept that, too.

If these account managers are not successful in making you pay up, then they would have a few options to choose from. They could take you to court (which, again, isn't likely), write off your debt and accept a loss, or sell your debt to another collection agency (which is what they would most likely do.) If they send your account to another collection agency, then that collection agency would continue the same collection practices.

Eventually, one of two things is going to happen if no one is successful in making you pay up: collection attempts would be seen as futile and would cease or you won't hear the end of a collection agency until the stature of limitations are up (that is, after a certain amount of time, you would be no longer required to pay back anything).

So, those are your bill collectors. We could now identify them. So, now we need to know how they work and why in the world do they annoy us so much!