When you are behind on your bills, one of the first things that you may think about is hiring a Collection Agency. These Agencies can be very helpful in getting your debt collectors to stop calling and harassing you, and they can also help to get your money back. However, Agencies do come at a cost.
What should I know about collection agency cost?
The first thing that you need to understand about Agencies is that they are going to charge you a fee. This fee is typically a percentage of the money that they are able to collect from your debtors. For example, if an agency is able to collect $500 from one of your debtors, they may charge you a fee of 25%. This means that you would owe the Agency $125.
In addition to the initial fee, Agencies may also charge you additional fees. These fees can include things like skip tracing (which is when the Agency tries to find someone who has skipped out on their debt), and legal fees.
Agencies typically work on a contingency basis, which means that they only get paid if they are able to collect money from their debtors. This can be a great arrangement if you have a lot of debtors who owe you money, but it can also be risky. If an Agency is not able to collect any money from your debtors, then you will not owe them anything.
We hope this information has been useful to you.