Debt Collections is Not Booming

August 30th, 2008, Author: User Image

Rick Vaughn, Categories: Rants

by Jeffry B

So how is business?

Granted, there are plenty more delinquent accounts than their used to be. However, they are almost impossible to settle. Credit Bureaus have 25 to 30 delinquencies that are extremely hard to collect on. Also it seems like everyone I talk to lately is in foreclosure or in the beginning stages.
To counter that my company has been hiring people left and right. I literally had to park on curb yesterday so that I would not be late.
The most obvious sign that things are not good is that “clients” (i.e Bank of America, Chase, Discover) are no longer focused on liquidating accounts with in two months of charge off. They now are starting to rate agencies on a 18 month liquidation rate.

So Rick, what does that mean for me?

Simply, the agencies are going to start toning down the “Sense of Urgency” of payment after charge-off. They are going to be more open to long-term settlements and payment options.
On the downside, for the consumer this will mean even more pressure for these agencies to perform. Pressure means more calls and more contacts.

How can that be?

The mortgage crisis is very far reaching. One the the main vehicles that was popular to consolidate debt in the past was home refinance. Now we all know that you now need a 800 FICO score to do that.
Personal debt is higher than ever, meaning the balances on accounts are much higher. How many people could you go to and ask for $10,000 to settle a debt? Probably not many!
So the next time you read an article like Struggle economy is booming business for some trades. Sometimes it’s not all rainbows and candy for the people within that industry. I’m convinced that a recession is not good business for anyone except funeral parlors.

The Truth of Credit