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Interesting Article - Tells you how much debt collectors pay for a debt


cheyenne52883
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Read a new article from Liz Pulliam Weston, pretty interesting.

Says that JDB's pay 9-12% for "fresh" debts (never collected on before) and 3-5% on older debt that has had 2 or more collection attempts....

Makes me rethink how much I offer when I negotiate a debt.

http://articles.moneycentral.msn.com/SavingandDebt/ManageDebt/10WaysToCurbSleazyDebtCollectors.aspx?page=2

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We do need some reforms that the article talks about. However, I continue to be amazed at how people like this author seem to only want to address the symptom rather than the problem.

“Sleazy new debt-collector tactics” and the sleazy debt-collectors who use them would be relegated to nothing more than an entry on Wikipedia if people simply stopped using debt.

As to JDBs and what they pay for the debts they acquire; why does this author not mention what their ROI is?

They pay such a low percentage for the debts because their chance of collection is low. Even were that not the case, I suspect that no one is going to start singing the praises of JDBs or be any more willing to settle debts with them than they are now even if the JDBs had perfect documentation and even if they paid 98% of face value for the debts they buy.

Again, the real problem is not that JDBs exist, the real problem is that the unpaid debts they can buy exist – until we fix that; any other sort of band-aid will ultimately fail.

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Here's a thought, R_N...how about we all we let all the credit card companies package our bad financial deceisions into a pile and sell it to one company and get the federal reserve to let them carry it on their books as an asset and then when we default the fed can step in and offer to bail them out.

Oh, wait...too late....Freddy and Fannie already thought of that...

Its really easy to say that we shoulda known better than to go into debt in the first place, but, there's an awful lot of more financially savy people than us out there encouraging our risky behavior...if they say its going to be okay, why shouldn't we beleive them?

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Here's a thought, R_N...how about we all we let all the credit card companies package our bad financial deceisions into a pile and sell it to one company and get the federal reserve to let them carry it on their books as an asset and then when we default the fed can step in and offer to bail them out.

Oh, wait...too late....Freddy and Fannie already thought of that...

Its really easy to say that we shoulda known better than to go into debt in the first place, but, there's an awful lot of more financially savy people than us out there encouraging our risky behavior...if they say its going to be okay, why shouldn't we beleive them?

LOL..That was good willling!

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Here's a thought, R_N...how about we all we let all the credit card companies package our bad financial deceisions into a pile and sell it to one company and get the federal reserve to let them carry it on their books as an asset and then when we default the fed can step in and offer to bail them out.

Oh, wait...too late....Freddy and Fannie already thought of that...

One or two or three very bad decisions don't justify more bad decisions; by the government (which of course is "us" or by ourselves individually). :)

...why shouldn't we beleive them?

Because they are wrong.

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I read before that collection agencies pay little on the dollar for debt. There's a whole industry evolving around debt...from getting into debt via building credit to drowning in debt via too much credit.

credit cards didn't exist till the late 1950's. before that time frame...it seems to me...the nation as a whole was better off. Good paying jobs, mothers could afford to stay home with the kids, medicine was cheap and so was food. People were also much more self sufficient. Clothes were made at home, people canned their own food.

Credit cards IMO reflect the train of thought that has been emerging since the 70's. Me and now!

My credit is absolutely shot and I still get credit card offers. I was getting credit card offers BEFORE I graduated from high school. I've heard stories of credit card offers coming addressed to small children and pets.

In the 80's the credit card industry changed its marketing tactic....to include people who back in the 70's wouldn't have qualified for a credit card.

What credit card co gives an 18 year old with no job, no college and income a 2,500.00 dollar credit line????

Back when I was in school...there was no courses on what a credit card was and its down falls. Our "home ec" classes just covered...how to write a check....and cut coupons.

We need to rethink what we teach the kids that are graduating now on what credit is and its pitfalls if we ever want to see the spending habits of the next generation turn back around.

IMO...credit card companies are a tool that is too highly available to people who don't understand them. No one in their right mind would stick an unlicensed kid behind the wheel of a car. When give a 18 year old kid a credit card that they know nothing about.

60 percent of the people living in the US are in credit card debt (John Tesh radio show). That number will only go higher!

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I read before that collection agencies pay little on the dollar for debt.
Semantics police, here. Collection agencies don't buy debt. Junk debt buyers buy debt. CAs work FOR both / either OCs and JDBs to hassle us for the money. The distinction is important because you deal with each of them a little differently.

As for the "good ole' days" before CCs...remember the great depression? Actually, they call that one "great" to distinquish it from the half dozen or so others that happened before it. The "great" one, I've been told, was also the result of credit gone wild. People then were buying stocks on margin...which is like a CC...and then betting that the stocks would just keep rising in value before they had to come up with the rest of the money.

Same sort of thing happened in the fifties (wasn't quite so great) when companies bought from each other on credit...and then a major recession occured when the companies couldn't pay their bills.

Point is...we've been here before. It would be nice if we (collectively) could learn from our mistakes...

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Willing seems to be making my point for me. :)

Credit cards are an especially dangerous product of the debt industry but in and of themselves, they are not the problem; the problem is debt.

Whether it’s buying stocks on margin, credit cards, “buy-here-pay-here” car lots, PayDay/Title loans, pawn shops, rent-to-own, home equity loans or any of the other never-ending ways people can go into debt, it is debt that is the underlying issue.

We can yell at the JDBs and CAs and their ilk forever and frankly, most of them deserve our ire, but we create 99% of our own problems when it comes to our finances.

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Semantics police, here. Collection agencies don't buy debt. Junk debt buyers buy debt. CAs work FOR both / either OCs and JDBs to hassle us for the money. The distinction is important because you deal with each of them a little differently.

As for the "good ole' days" before CCs...remember the great depression? Actually, they call that one "great" to distinquish it from the half dozen or so others that happened before it. The "great" one, I've been told, was also the result of credit gone wild. People then were buying stocks on margin...which is like a CC...and then betting that the stocks would just keep rising in value before they had to come up with the rest of the money.

Same sort of thing happened in the fifties (wasn't quite so great) when companies bought from each other on credit...and then a major recession occured when the companies couldn't pay their bills.

Point is...we've been here before. It would be nice if we (collectively) could learn from our mistakes...

But the great depression was the result of wall-street collapsing and none of the banks having the fed. insurance to cover the wide spread panic and income loss. That money didn't just disappear...it simply went from one holder to another.

Credit cards still didn't come on the scene for another couple of decades after we bounced back.

The federal government placed in certain safety nets to prevent it. Next time there is a great depression it will be debt induced. Whether it's the government's debt or civilians. Our government no longer uses anything solid (like gold) to back our currency. It's all back by name alone now and the majority of the fed's super transactions are done on computer (from a secret location)

The other thing that could place us in a depression from the 30's would be massive climate change. (Or if the world ens on 12/21/2012 like the yo-yo's are predicting.)

Your post made me think of the All In The Family theme song. What a great theme song! :D

There's a lot of great statements in this thread!

Gawd, that show was funny. Loved Archie.

Willing seems to be making my point for me. :)

Credit cards are an especially dangerous product of the debt industry but in and of themselves, they are not the problem; the problem is debt.

Whether it’s buying stocks on margin, credit cards, “buy-here-pay-here” car lots, PayDay/Title loans, pawn shops, rent-to-own, home equity loans or any of the other never-ending ways people can go into debt, it is debt that is the underlying issue.

We can yell at the JDBs and CAs and their ilk forever and frankly, most of them deserve our ire, but we create 99% of our own problems when it comes to our finances.

We do...and no one seems worried about the current trend. I shutter to think of a day where 90 percent of all young adults entering the workforce are already in credit card debt.

I like the "don't feed the pig" commercials about excessive spending. Whish they had more of them.

To give an idea of how wide spread the over spending is...out of my graduating class of 1989...I still have contact with around 10 other students and 5 of those students have either filed bankruptcy or came very close to filing.

The mind set of the 80's has not changed. The kids coming into the workforce still view credit as "free money" and an "entitlement."

I still think the best course in addressing the issue is credit card course, with consumer rights and what happens to debt, how it is collected and what tptb can take from a debtor needs to be pounded into their heads.

And into the heads of older Americans too.

We (as a whole) do cause our own debt. We (as a whole) need to find a way to curb this trend.

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Read a new article from Liz Pulliam Weston, pretty interesting.

Says that JDB's pay 9-12% for "fresh" debts (never collected on before) and 3-5% on older debt that has had 2 or more collection attempts....

Makes me rethink how much I offer when I negotiate a debt.

http://articles.moneycentral.msn.com/SavingandDebt/ManageDebt/10WaysToCurbSleazyDebtCollectors.aspx?page=2

Yes, I stumbled on this the other day looking up united coll. bur.

http://www.debtconnection.com/agencies.asp

Click on their name at the top and you will see their placement volume and annual revenue. The amount of money in this field is no joke. Really does make you rethink your offer amount.

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