Recent reports have released staggering numbers about the current state of our economy. The unemployment rate has hit a high of 9.1% and the poverty rate rose to 15.1 percent, nearly a full percentage point in a single year. The average income has dropped by 2.3% and the number of privately insured Americans is dropping each month. With so many people facing bankruptcy and foreclosures, it is surprising that even the debt collection business is having to fight to stay in operation.
Debt Collection: Not a good time to be in business
One would think that debt collection companies are living large these days with the growth of personal debt and people drowning under their mortgages. The truth is they, like so many other businesses, are having a tough time keeping the doors open. Why? In short, because more people are finding alternative ways to alleviate their debt burdens that by paying debts in full.
In the past, creditors would pay debt collection companies for their efforts of contacting and securing payments from debtors. These days, more people are seeking debt negotiations directly with their creditors or choosing debt elimination options. By negotiation with a debtor directly, the creditor can secure debt payments without having to pay the debt collection company a fee for their efforts. Bankruptcy also hurts the debt collection business by circumventing debt repayment all together or arranging a court issued debt repayment plan with the creditor directly.
As the economy continues to put pressure on everyone it seems as though no business is safe from its grasp.