Spragins, Barnett & Cobb, PLC
Call 731-300-1592

What steps can lenders take to recover debts?

Many people in Tennessee carry some sort of debt. It may be a mortgage, a car loan or credit card debt, to name a few. While most people dutifully pay back their debts, there will always be some that do not make the required monthly payments on their debts. When this happens, lenders may work with debt collectors to try to recover what they are owed.

Before enlisting the help of a debt collector, generally, the lenders will attempt to recover debts internally for the first six months the debtor is delinquent. Sometimes, it is possible for the lender to reach a settlement with the debtor that is satisfactory to both parties.

If the internal collections fail, a lender will assign the debt to an outside organization. The lender continues to own the debt, but the third-party agent will be the one contacting the debtor to collect what is owed. If successful, the outside organization will receive a commission from the lender.

Finally, if the outside organization is unable to collect on the debt, then the lender will write it off and place it up for sale to an outside collection agency, for example, a debt-collection law firm. The collection agency will generally purchase the debt at a price that is lower than what is owed. At this point, the collection agency owns the debt and the original lender is no longer involved in its collection. The collection agency will then work with the debtor to collect on the debt.

Debt collectors are not always the monsters they are made out to be. They are simply trying to obtain what the lenders they are working with are owed. While debtors do have rights under the Fair Debt Collection Practices Act, there are lawful means through which lenders can try to collect on debts. Lenders who are facing claims that they violated debtors' rights or who are having difficulties in recovering what they are owed may want to take the steps necessary to understand what options they have to legally protect their interests and their rights to collect on the debt.

No Comments

Leave a comment
Comment Information

Contact us today to learn more about how we can help you resolve your legal situation.

To discuss your specific situation and to learn more about how we can help, call us at 731-300-1592 or submit an inquiry via our online contact form.

Spragins, Barnett & Cobb, PLC
312 East Lafayette
Jackson, TN 38301

Phone: 731-300-1592
Fax: 731-424-0562
Jackson Law Office Map

Email Us For A Response

Tell us more about your legal issue We are here to help.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy