How to Start a Home Based Debt Collection Agency

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

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.

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.

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.

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.

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.

Tips & Warnings

• Before purchasing software, make sure to review the debt collection programs thoroughly. Buying software is more than the investment of purchasing the actual program; there is the learning curve involved. You don't want to spend a lot of time learning debt collection software only to find out that it doesn't adequately serve your purposes.

Resources

• Fair Debt Collection Practices Act
• Starting a Collection Agency, How to make money collecting money
• How to Set Up a Debt Collection Agency in Texas
• How to Chip Away at Outstanding Debt
• How to Survive Having More Month than Money

[revenue51]

on 1/20/2010 wow moneymachine, although machine is a bit overstated. First, you paid more than double the going rate for debt that is purchased in portfolio form. Purchasing debt is profitable if you are aware of what your buying. 100k of debt for 1000.00 can cost you if it is only 10 accounts with 10k balance each. Why would you accept anything other than balance in full? Do you really have the heart and soul for this? At minimum its 20% down, then 100.00 per month ppa. Your residual payments over time add up. my ppa account that i have debit card or checks in house for start my month off at 38k. They build. You have the right idea, but, buying bad debt is an art form. Good luck but dont sell yourself short. You just lost alot of revinue.

[moneymachine]

on 1/19/2010 Are you tired of looking for a job? Or just tired of a boss who dont care?

Well I started doing something new and love it and want to share it with you.


What I do is buy debt from banks at low cost and collect on them. Most banks want all there money now or thats it
well guess what when they dont pay they just writre it off and sell the debt.



For example I got a $100,000 worth of det for $12,000 that is only 4 cents on the dollor great buy.

Myfirst month I made $12,500 Here is how I did it. I made payment arrangments with my customers for $125.00 and did that on
a 100 accounts. I was excited as all get out.

This company offers you every thing you need software for you data base. All you skip tracing tools and how to set
up your merchant account to run your payments. Also they can fdcpa cert you dont have to do this however it helps
you understand the business only tak...

[mamavic]

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]

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]

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?