Celebrating 10 years! 2007-2017

debt buying/opening a collections firm

Seems fairly scummy. But it is an option. Anyone have experi attorneydavid05/18/17
Resident chill bro on debt collection is vohod. I am sure he triplesix05/18/17
I think you'd need a lot of capital to start. You will need mrtor05/18/17
Debt buying has OCC ramifications. The problem with most deb vohod05/18/17
word of advice: a lot of attorneys jump into debt buying dingbat05/19/17
attorneydavid (May 18, 2017 - 5:22 pm)

Seems fairly scummy. But it is an option. Anyone have experiences doing this. I figure you'd need to hire a collector and then do the lawyering and sue the better targets.

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triplesix (May 18, 2017 - 5:25 pm)

Resident chill bro on debt collection is vohod. I am sure he will provide substantive feedback about the glory of this practice area.

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mrtor (May 18, 2017 - 5:54 pm)

I think you'd need a lot of capital to start. You will need to buy substantial amounts of debt to have a shot at turning any sort of profit. Even at pennies on the dollar, that will add up quickly.

From there, you need to be well versed on collections law. It isn't a practice area you dive into without experience. Screw ups can result in significant penalties, especially if you mess up consumer collections.

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vohod (May 18, 2017 - 6:01 pm)

Debt buying has OCC ramifications. The problem with most debt portfolios is that they are national. You dial for dollars, probably get nothing, then you need to sue it out. It is de facto illegal now to use law firm letterhead outside of a state where you are licensed. Also many states have registration and licensing requirements to collect. Not all though. Things to think about. Many states exempt lawyers from said collections licensing.

In regards to actual collections for first parties? Getting small time clients isn't too hard. But the margins suck. Many want YOU to front filing costs. You want to get people to pay between the first 1692g letter and suit.

The CFPB has done a lot in this area to enforce compliance management systems. This in turm causes consolidation of the rank and file firms down to a few regional mills.

I eventually want to do this, unless I can become a county attorney first. I'd target local dentists or for-profit providers along with local CUs. They don't have ACA, Medicare, or much of the DoddFrank/OCC spider webs.

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dingbat (May 19, 2017 - 9:29 am)

word of advice:

a lot of attorneys jump into debt buying thinking they can write a few mean letters and collect.
They tend to overpay for the portfolio, underperform in terms of conversion, and are most likely to screw up (FDCPA, TCPA, etc.)

The general approach is to send out letters to everyone, then double down on anyone who responds and the big accounts.

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