Collections and Recovery

Collections and recovery pages explain what happens after a creditor or lender tries to recover money from a seriously delinquent account. This section focuses on the organizations, status labels, and borrower interactions that show up once normal servicing breaks down.

Readers often reach this section after seeing a notice from a collector or a collection-related item on a credit report.

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• Collection Agency
• Third-Party Collection
• Payment Arrangement
• Deficiency Balance

In this section

• Collection Agency
  A collection agency is a business that tries to recover unpaid debt on behalf of a creditor or after buying the debt.
• Third-Party Collection
  Third-party collection means debt-collection activity performed by a separate collector rather than the original creditor.
• Recovery Rate
  Recovery rate is the share of a defaulted or charged-off balance that a creditor or collector is able to recover.
• Settlement Offer
  A settlement offer is a proposal to resolve a debt for less than the full claimed balance.
• Debt Buyer
  A debt buyer is a company that purchases unpaid debt and then seeks to collect on it.
• Repossession
  Repossession is the lender's recovery of pledged property after serious nonpayment on secured debt.
• Garnishment
  Garnishment is a process that directs part of a debtor's income or funds toward debt recovery.
• Payment Arrangement
  A payment arrangement is an agreed plan to repay overdue debt over time instead of all at once.
• Deficiency Balance
  A deficiency balance is the remaining debt still owed after collateral is taken and sold for less than the amount due.