In this article, we are going to discuss debt recovery. Debt recovery and debt collection are the terms which are related to each other. The only difference between these terms is who retrieve a debt. You can check more about debt recovery here http://www.acmgroup.com.au/
In data collection, a creditor tries to recover consumer credit and loans that are not paid back by the customer. Similarly in data recovery loan is retrieved that continue to go unpaid example credit card balance. Here the creditor hires a third party which is known as a collection service that focuses on collecting the money.
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It should be noted that debt recovery is directly related to credit score. In case debt recovery service contacts you that means there is a record that is been defaulted on a loan and have delinquencies. Such delinquencies are reported to credit bureaus that ruin your credit score and lesser down future loan opportunity.
The debt recovery services follow certain steps to recover the amount. You should know exactly what to expect from a debt recovery agent when contacted.
The Debt Collection Process
The debt collection process comes into action if there is any missed payment on a credit card or loan. The debtor is given a particular time period from the bill due to date to pay the entire bill before it is been reported to credit bureaus.
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In this process, creditor tries to contact debtor via phone, email or letter to get their payment. After some time the debt is handed over to another department in the same company. They report the delinquency to the credit bureau and even shut down credit card account accordingly. You can check this out to know more about debt recovery.
Debt Recovery Process
In case the debt refers to a collection agency then the creditor sends claim information and supporting documentation. The document is sent to the debt collector that shows the failure to pay according to the terms of the agreement. Then the claim is reviewed and the recovery process begins.