How to Start a Home Based Debt Collection Agency

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By Tidbits .
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Bills and Debt

As odd as it sounds, now is the perfect time to start a home-based debt collection agency. It's no secret that many people are falling behind on their outstanding debts. From mortgages to loans to credit cards, there is an increased need for debt collection services. While starting a home-based debt collection agency may not be have been the top business on your list to start, it is definitely a much-needed service. Here's how to go about starting your own home-based debt collection agency.

Difficulty: Moderate

Instructions

Step 1

Analyze your personality type. Not everyone has the personality to start a debt collection agency. Among other personality traits, a home-based debt collector must be persistent, patient, empathetic, organized and have a knack for invitation. Realize that many of the people who default on their outstanding loans do so as a result of situations beyond their control. Being empathetic can help you in collecting some of the outstanding debt. On the other hand, investigative qualities come in handy tracking down those folks who try to buck the system and get away with a scam.
Step 2

Home Office

Obtain the necessary office equipment. As with most home businesses, a computer is a staple. In addition to a computer, a home-based debt collection agency should have a dedicated telephone line (it’s much more professional than having 5 year old Joey answer the phone), a fax machine, and copy machine. The fax and copy machines may not be necessary at start up but may prove to be helpful as the agency grows.
Step 3

Create a website. This pretty much goes without saying. In today's Internet age, a business without a website is almost unheard of. It doesn't have to be anything fancy. All you’ll need is a site that has the contact information for your debt collection agency and a catchy slogan to entice the reader to request more information.
Step 4

Past Due Bill

Investigate debt collections software. While the software is not something that should be purchased at the initial startup, once the business gets up and running you might want to look into software to help your business run more efficiently. Sentinel and Collector! are two debt collection software packages to look into.
Step 5

Gain the necessary education. In addition to becoming familiar with the Fair Debt Collection Practices Act, folks looking to start their own home-based debt collection agency should contact their Department of State to find out if there are any additional licensing requirements.

Comments

mamavic said

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on 2/16/2009 This is a great idea! I'm not sure I have the patience for this type of work,so I'm glad you pointed it out!5*

PowerofWords said

on 1/22/2009 Great article. It is definitely a great business to start especially now. Try local companies also. I found in conversations that they end up just writing it off versus trying to get it collected. Also make sure you open an account just for the payments you receive. 5*

Plum said

on 1/6/2009 yes, but how do you get paid? I know someone who has a large debt collection company and they buy debt from credit card collection agencies for pennies on the dollar. Is that what has to happen with this type of business as well in order to make a living? (and this person I know makes a fantastic living) and how do you go about purchasing the debt?

Kallicat said

on 12/27/2008 I might look into this type of business if my other options don't pan out. I used to collect debt for businesses I worked for when I was in account receivable. I am adding this to my favorites.