debt-advice

Collection agencies will work with debt settlement firms if needed. But lots of them view the firms as unnecessary & even dangerous to consumers.

Two Sides To This Dirty Coin

Collection firms have mixed views of debt settlement firms, seeing them as filling an important purpose, but also saying that collection agencies can fill the same needs without the fees that debt settlement firms charge.

“There is a place for them in the industry,” said Mark Neeb, president & CEO of The Affiliated Group, a Rochester, Minn.-based debt collection firm that employs 110 people. “There is no surprise that a lot of people today are looking for debt help. A lot of people don’t know where to turn.”

Consumers with debt trouble would be better off going straight to the collection agencies that are handling the accounts, argues Eric Medrano, CEO of california Recovery Systems, Inc., a Sacramento, Calif. firm with 28 full-time collectors.

But who does that?!

Maybe you should! As Eric points out, consumers have to pay a large upfront fee to a debt settlement firm before any funds is paid to a collection firm (or directly to a creditor, if the account has yet to be turned over for collection).

“I’m grateful for the funds that they bring to the table, but companies they could collect more if they weren’t around,” Medrano conceded, arguing that the fees paid to the debt settlement companies would be better spent to help settle the outstanding debts.

So it’s up to you. Since Debt Settlement firms charge fees for their services, you might be better off negotiating directly with your creditors.

Next time, I’ll talk more about what it takes to talk to your creditors…

I’ll keep you posted…

Jon McG

Everyday Debt Advice

Debt Settlement

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