How Do Debt Collectors Get Paid

anyone know how these clowns get paid? they harass me all day so i have to assume they are on commission?

So the actual debt collector (the person who is calling you) usually gets a percentage of whatever they collect for a month.  I'm not positive what percentage they get though.   Does anyone have information about that?  I do know that really good ones can earn up to $80-$100k / year because of their commissions.

Collection agencies either get paid a percentage of what they collect for creditors that assign them accounts to handle or in other cases, they buy the a portfolio of thousands of accounts and whatever they collect is what they earn. 

For collection agencies-

Typically, a creditor will "assign" the debt to a debt collector if the account is no longer an asset to their books. This is the case when the account becomes several payments past due, as the liklihood of collecting the debt becomes less and less as the debtor continues not to make monthly payments (the creditor is no longer raking in the interest).

Once the debt collector has retained the account for collection, they will get a percentage of whatever they collect (on average around 15%), and the remaining amount will be sent back to the original creditor.

For collection agency employees-

Yes, you are correct, the majority of debt collectors get paid on a commission basis. This would shed light on the fact as to why many of them are so aggressive and often use scare tactics to try and get people to cough up money as soon as possible.

One other thing- I do know that the majority of debt collectors get paid a salary. The commissions is where the big gucks lie, but the average first year collector makes roughly $30 K a year, while someone with 10 years experience for example can make roughly $50 K or even more depending on the collection agency they work for.

So my two Discover accounts are with debt buyers. Do they get paid the same way? They seem pretty aggressive too.

Most debt collectors are getting paid by commission basis.  Commissions are calculated at a certain percentage.  So the bigger the amount they collect from the debtors the more they get from the creditor.  I know of some debt collectors too who, aside from receiving commissions, also receive regular retainer's fee from the creditor-clients.

In terms of how do debt collectors get paid- like the actual agency- it is usually somewhere between 10-20% of whatever they collect. The rest is sent back to the original creditor.

Another question to ask is how do you get to pay the debt collectors especially if you are unemployed (?)

If you don't have savings, you can sell some of your valuables to come up with the amount needed, but that is after you have negotiated the terms and the amount itself. That or you can come up with enough money to do a professional debt settlement.

And yet another question to ask is how do you get out of paying the debt collectors (?) Is it possible? And do debt collectors get paid anyway even if they weren't able to collect (?)

 

how do you get out of paying the debt collectors (?) Is it possible?
Yes I think, if the statute of limitations on your state has already expired, you can write them a cease and desist letter stating the fact. They are persistent though and will find a way for you to pay.

And do debt collectors get paid anyway even if they weren't able to collect (?)
I don't know. Perhaps, they just won't get commission?