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List of collection agencies in Arizona

Arizona debt collection laws

Fair Debt Collection Practices Act (FDCPA): This is a federal law that protects consumers from abusive, deceptive, or unfair debt collection practices. It sets limits on when and how debt collectors can contact consumers and provides consumers with rights to dispute debts and obtain information about the debts.
Fair Credit Reporting Act (FCRA): This federal law regulates the collection and use of consumer credit information. It gives consumers the right to access their credit reports and correct any inaccuracies.
Arizona State Statute of Limitations: In Arizona, as of 2021, the statute of limitations for credit card debt and other open accounts was six years. For written contracts, it was also six years. These statutes set the maximum period of time after an event within which legal proceedings may be initiated.
Arizona Debt Collection Licensing and Regulations: As of 2021, debt collection agencies operating in Arizona are required to be licensed. Consumers can file complaints against debt collectors with the Arizona Department of Financial Institutions if they believe the debt collector has violated state or federal laws.
Arizona Garnishment Laws: In the state of Arizona, if a creditor obtains a judgment against a debtor, they may be able to garnish the debtor’s wages or bank account. However, there are limitations on the amount that can be garnished. As of 2021, creditors could generally garnish the lesser of 25% of a debtor’s non-exempt disposable earnings or the amount by which a debtor’s non-exempt disposable earnings for the week exceed thirty times the federal minimum hourly wage.
Arizona Exemptions: Arizona has laws that protect certain types of property and assets from being seized by creditors even if a judgment has been obtained. These exemptions include a homestead exemption, personal property exemption, and protections for retirement accounts.
Arizona Fair Debt Collection Practices Act: Some states have their versions of the federal FDCPA, but as of 2021, Arizona did not have a state-specific version of this act.

Since laws and regulations are subject to change, it’s important to verify the most current legal information by consulting a lawyer or legal advisor with expertise in debt collection laws in Arizona.

Important information about Arizona:

A complete list of federal laws to be followed by all collection agencies in USA are listed here: Debt collection laws

The Arizona law covers any person or entity that is deemed a debt collector under the FDCPA.
Arizona debt collection agency can collect all across the state including these cities Phoenix, Tucson, Mesa, Chandler, Scottsdale, Glendale, Gilbert and Tempe.
You should hire a collection agency with extensive experience of collecting in the state and a complete understanding of Arizona collection laws.
All collection agencies in the state must be licensed and bonded. However, unlike California and New York, it is not easy to sue a collection agency if they violate collection laws.
The average Arizona resident has a credit card debt of $7100.
The average mortgage debt in Arizona is $202,000
Median annual household income of $56,600
Arizona’s population is about 7.2 million
An average college graduate is carrying about $24,000 in debt
Per capita auto loan debt: $4,890

Selecting a Collection Agency in Arizona.

Debt collectors should be well trained to follow Federal and Arizona debt collection laws.
Select a collection agency that can handle both Big and Small clients.
Should be able to do collections in English and Spanish.
Should offer both Flat Fee and Contingency Collection Services.
Provide an online client portal to submit new accounts and to stop the service when needed.
Should have collection experts for your industry.
Report debts to Credit Bureaus if requested by the client.

Search Collection Agencies in Alabama

Directory >> USA >> Alabama

List of collection agencies in Alabama

Alabama Collection Laws

Here are some relevant federal and state laws that were in effect as of 2021:

Fair Debt Collection Practices Act (FDCPA): This federal law prohibits debt collectors from using abusive, unfair, or deceptive practices to collect debts from consumers. It sets rules on when and how collectors can contact consumers, what they must disclose, and gives consumers certain rights in disputing and obtaining information about the debt.
Fair Credit Reporting Act (FCRA): This federal law regulates the collection, dissemination, and use of consumer credit information. It provides consumers with the right to access and correct errors in their credit reports.
Alabama State Statute of Limitations: In Alabama, like other states, there is a time limit for when creditors can sue consumers for unpaid debt. As of 2021, the statute of limitations for open-ended accounts, such as credit cards, was three years, and for written contracts, it was six years. However, these limitations can change, and various factors can affect the calculation of these time periods, so it’s essential to verify the current laws.
Alabama Exemption Laws: Alabama has exemption laws that protect certain types of property from being taken by creditors to satisfy a judgment. For example, Alabama may allow you to exempt a certain amount of equity in your home, car, or other personal property.
Garnishment Laws in Alabama: If a creditor obtains a court judgment against you, they might be able to garnish your wages or bank account to collect the debt. Alabama has laws that limit the amount that can be garnished and protect certain types of income, such as Social Security benefits, from garnishment.
Alabama Mini-FDCPA: Some states have enacted their versions of the FDCPA that may provide additional protections or remedies for consumers. As of my last knowledge update, Alabama did not have a state-specific version of the FDCPA. It’s essential to check if this has changed.

Since laws and regulations change, and because individual circumstances can vary, it’s important to consult a lawyer or legal advisor for specific advice on debt collection issues. Please ensure that you are referring to the most current legal information or consulting a legal expert in Alabama for the latest details on debt collection laws in the state.

Important information about Alabama:

A complete list of federal laws to be followed by all collection agencies in USA are listed here: Debt collection laws

75% of wages are exempt from garnishment.
Alabama debt collection agency can collect all across the state including these cities Birmingham, Montgomery, Huntsville, Mobile, Tuscaloosa, Hoover, Dothan, Decatur, Auburn and Gasden.
You should hire a collection agency with extensive experience of collecting in the state and a complete understanding of Alabama collection laws.
The average Alabama resident has a credit card debt of $9300.
The average mortgage debt in Alabama is $141,000
Median annual household income of $48,123
Alabama’s population is about 4,900,000
An average college graduate is carrying about $31,000 in debt
Per capita auto loan debt: $4,780

Selecting a Collection Agency in Alabama.

Debt collectors should be well trained to follow Federal and Alabama debt collection laws.
Select a collection agency that can handle both Big and Small clients.
Should be able to do collections in English and Spanish.
Should offer both Flat Fee and Contingency Collection Services.
Provide an online client portal to submit new accounts and to stop the service when needed.
Should have collection experts for your industry.
Report debts to Credit Bureaus if requested by the client.

Consumer vs Commercial Collection Agency : Differences

Aspect	Commercial Collection Agency	Consumer Collection Agency
Type of Debt	Business-to-Business (B2B)	Business-to-Consumer (B2C)
Debtor Profile	Businesses, Companies, Corporations	Individual consumers
Average Debt Amount	Higher amounts (often thousands to millions)	Lower amounts (usually hundreds to thousands)
Collection Approach	Professional, negotiation-based, relationship-focused	Often more regulated, consumer protection-focused
Governing Regulations	Primarily UCC (Uniform Commercial Code)	FDCPA, FCRA, TCPA, CFPB
Reporting to Credit Bureaus	Less common, typically commercial bureaus (D&B, Experian Business)	Common, personal credit bureaus (Experian, Equifax, TransUnion)
Legal Action Frequency	Higher likelihood due to higher amounts	Lower likelihood, reserved for significant cases
Collection Methods	Negotiations, structured payments, relationship maintenance	Calls, letters, credit bureau reporting, sometimes legal threats
Emotional Aspect	Lower, usually professional relationship	Higher, personal and sensitive situations
Account Complexity	Typically more complex (contracts, invoices, disputes)	Usually simpler (credit cards, medical bills, loans)
Settlement Flexibility	Higher, frequent negotiation and settlements	Moderate, subject to stricter legal constraints
Impact of Nonpayment	Business disruptions, cash flow issues	Credit score impact, personal financial distress
Cost Structure	Often contingency-based (15%-50%)	Typically contingency-based (20%-50%), occasionally fixed fee for smaller debts

Bankruptcy laws are different for individuals and companies.
The way Credit Check is run on individuals vs companies is vastly different.
A good commercial collection agency would likely be registered with the International Association of Commercial Collectors (IACC). Collection agencies dealing with consumer debt are affiliated with the Association of Credit Collection Professionals (ACA)

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One may wonder, when a “debt is a debt, ” why do we classify it as a Commercial or a Consumer debt? When it comes to debt collections, they are treated quite differently, primarily due to the difference in debt recovery laws instituted by the US Government.

A commercial debt collection agency treats every case differently. Scenarios change depending on the type of business. For example, the approach involved in collecting money from a hospital will differ from that of a car dealership. Collection Agencies maintain a delicate balance between recovering the debt and maintaining good business terms between the parties. The average balance of commercial accounts is generally much higher when compared to consumer debts. Commercial collection agencies are highly specialized in their field.

A 30-day dispute period does not apply to Commercial Collections
When the debtor is a consumer, a collection agency has to provide a 30-day dispute period regarding the debt. During the dispute period, a consumer can also ask the Collection Agency to prove that he indeed owns the debt (also called as the “verification of debt”). However, a commercial collection agency can start the recovery process right away.

The commission fee is lower for Commercial Collections:
The contingency fees of a commercial collection agency vary from 10% to 50%. For accounts over $500K you can negotiate a collection fee of about 10%. For accounts about $50K, the fee is around 20%; for accounts lower than $1K, it’s around 50%. It is always around 35% to 50% for Consumer Collections and averages around 40%. Even with lower contingency fees, a Commercial Agency can make more money per case due to higher balances. If a commercial debt is over one year, 5% extra fees may be charged.

How do Debt Collection Agencies work?

Collection agencies are specialists in debt recovery. Their highly trained and well-equipped teams can successfully collect even from accounts that are typically difficult to recover. When in-house staff struggles to collect overdue accounts, businesses often turn to professional collection agencies for assistance.

Collection agencies play a vital role in the financial ecosystem. Without their involvement, many outstanding debts would remain unpaid, resulting in significant losses for businesses and medical practices. While no collection agency can guarantee the recovery of 100% of the assigned debt, they employ proven strategies and work diligently to collect as much as possible. In fact, a single call from a professional debt collector can have a greater impact on a debtor than repeated attempts from in-house staff.

Types of Debt Collectors:

1. “Collection Agencies” – Agencies that act as a middleman between the creditor and debtor using standard recovery techniques. They attempt to collect the debt in full. Some agencies operate in one state only while others have a nationwide license.

2. “Debt Buyers” -Debt buyers buy debt that is deemed unrecoverable. Debt buyers buy unpaid accounts by paying pennies on the dollar and readily agree to settle the debt even if a way-lower payment is offered.

3. “Collection Lawyers“: Unlike Collection Agencies, they do not have a single collections approach for all accounts. They study each case, give a customized solution and quote a fee accordingly.

Here is a detailed explanation for each of them.

1. Collection Agencies

When a creditor approaches a collection agency, he is offered three types of collection services: Collection Demands (Letters), Collection Calls and Filing a Legal Suit.

a) Collection Letters (Fixed Fees Service- Accounts purchased in advance) – A collection agency sends up to 5 collection letters to a debtor and charges between $10 to $25 upfront per account for this service. Collection letters are sent every ten days or so. They run a “USPS-Address-Change” scrub on these accounts to ensure the letters are mailed to the latest address of the debtor. This is also called skip tracing.

They also check if the agency/creditors are legally prohibited from collecting a debt. For example, when a debtor has been granted bankruptcy protection or if he has deceased.

During the Collection Letters service, all amounts go directly to the creditor, the collection agency keeps nothing other than the small flat fees they had charged earlier (roughly $12-$16 per account). You can also add the late fees to the amount due if your contract permits.

The creditor must report all payments made by the debtor directly to them so that the Collection Agency can print the correct (lower) outstanding amount on the remaining letters. They will stop sending letters if the amount has been Paid in Full or deemed uncollectible through written demands and may require stronger action.

Collection Letters service is usually recommended for debts that are within 30-120 days past-due date. They give far superior results than your own in-house collections. You may check our sample debt collection letters to get an idea of what the debtor receives from a Collection Agency.

b) Collection Calls (Contingency-based, No Collection – No Fees) – This is where an actual human being (debt collector) picks up the phone and starts making phone calls to the debtor. This is a contingency-based collections service and is usually recommended for debts older than 120 days, or if the Collection Letters service did not recover the debt.

A Collection Agency would usually not accept an account for collections if the debt is older than 3 years. They also specify the minimum amount of debt that can be assigned for this service, usually, there is a $100 is the cutoff limit.

With their extensive experience, debt collectors are able to make a perfect collections call. They are able to handle debtor excuses way more professionally, patiently, and smartly than your own employees. Most agencies hire multilingual staff to handle Spanish collections if required.

The collection agency keeps 33% to 50% of the amount collected per your agreement and passes the remaining money to you (the creditor). Do not always fall for those ultra-low-cost collection agencies, because their recovery rates may be a lot lower. If a collection agency is near you do not hire them just because of that reason, in debt collections, the location does not matter.

Hiring a good collection agency is really important to get superior collection results.

c) Filing a Legal Suit (Contingency based) – This is the third type of collection service where a Debt Collection Agency’s attorney (or a partner attorney) sends legal notices to the debtor. The attorney may even try to collect the outstanding amount against the assets of a debtor or garnish his wages. Assets could be the debtor’s bank account, brokerage account, and even against certain types of real estate that the debtor may own.

Collection agency usually takes a cut of around 25%-40% for these kinds of cases. These accounts should carry high-value debts to justify the cost of hiring an attorney.

Collection fee can be negotiated with the collection agency in case the outstanding amount is in thousands of dollars or if it is a B2B debt (commercial/business debt).

In the case of B2C debt (individual/consumer debt), there is usually no room for negotiation. Individual debts are harder to collect, and unlike B2B accounts the B2C debts are subjected to far more stringent collection laws.

2. Debt Buyers:

Debt Buyers purchase bad debt in bulk and pay a little money to the creditor for it. The collection activity starts after the purchase. For example, if the outstanding debt on an account is $1000, a Debt Buyer may buy it for $50 only. Accounts are usually settled at a lower price point. For example using the above scenario: A debt buyer will happily settle the account even if the debtor offers to pay $200, for a nice $150 profit. The Debt Buyer keeps 100% of the money recovered, and does not need to share anything with original creditors.

3. Collection Lawyers:

A collection agency does not always do collection activity, many lawyers are in this industry as well. They study each case, give a customized solution, and quote a fee accordingly. In this case, a debtor will receive a legal notice or a phone call from the lawyer’s office. If there is a co-signer on the debt, the collection activity can also be made on the co-signer.

Fair debt collection laws:

There are several “Consumer protection laws” and the “Fair Debt Collection Practice Laws” that all debt collectors are supposed to follow during consumer collections. Here is the list of all debt collection laws.

A debt collection agency should be respectful, law-abiding and truthful. They should not discriminate against people based upon gender, race, age etc. They should not contact you in odd hours, like late evenings or very early mornings. They cannot try to threaten you bypassing statements like “If you do not pay, the police will arrest you“.

If the collection agency determines that the debtor cannot pay the debt in full, they can settle an account for a slightly less payment if the creditor allows doing so. A debt collection agency may also allow the debt to be paid in monthly installments. Debts do have an expiry date, there are some statute of limitations beyond which a collection agency is not allowed to sue a debtor. For example, many states in the USA, have a rule that a debt older than 4 years cannot be collected upon. Other states have a 3 or a 10-year cut-off period.

Credit Bureau Reporting

Non-payment of debt can be reported to credit bureaus ( Transunion, Experian and Equifax) by the collection agency if the original creditor wishes to do so. This negative entry on the debtor’s credit history report can be quite damaging because the chances of getting a new loan goes down significantly for many years. He may also face problems in changing jobs as many employers run credit checks on their prospective employees.

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Importance of collection agencies

Due to the nature of their business, debt collection companies have a bad reputation. FTC gets the highest number of complaints from this industry. But see the flip side, there are thousands of collection agencies in the USA, giving employment to hundreds of thousands of individuals. They also help many businesses to avoid going out of business due to unpaid bills, saving their jobs as well.

Do read our article about how to improve the cash flow for your business and minimizing accounts receivables. While you outsource all those problems in debt collection to a 3rd party collection agency, you can focus on more important things like expanding your business or serving your existing clients.

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