The most common perception about the industry of debt collection today is nearly overwhelmingly bad and unfavorable. In today’s culture, debt collectors, are frequently characterized as cruel, uncaring, vulturine characters who pester and harass individuals and families when they are in a very vulnerable state. Although only a small number of debt collectors may perform their job in this kind of way, this representation is just about completely untrue.
Debt Collection – How Does It Positively Impact The Economy
Debt collection has a very substantial and important positive influence on the economy, both in the macro and micro level. Moreover, a debt collection agency, like Frontline Collections, adheres to the laws and regulations in the industry so as to uphold the rights as well as maintain the consumers’ dignity. Let’s have a look at some:
Federal, State, and Local Taxes
Similar to any other kind of business, a debt collector or debt collection agency pays numerous taxes to the local, state, as well as federal governments which would depend on their revenues. As per a survey conducted by Ernst & Young – ACA International, the federal government amassed from the debt collection industry an amount of 852 million US dollars in taxes in 2016. The local and state governments, on the other hand, was able to collect 652 million US dollars and paid for projects and programs such as medical care, public utilities, and transit infrastructure. Furthermore, a debt collection agency pays for property taxes as well through their real estate claims and leases. Those paid taxes then go to local schools found in their community.
Employment Opportunities and Revenue
A debt collection agency helps better the revenue of companies and businesses who hired them by retrieving delinquent accounts. The revenue would greatly help these businesses and companies keep and increase their workers. Debts that couldn’t be recovered are added to the local economy which provides businesses and workforces bigger opportunities. Debt collection agencies directly contribute to employment as well by hiring of collection agents and support staffs for their offices.
A fruitful collection could be beneficial not only to the agency but to the family or person clearing out the debt. Frequently, debt collection agencies are able to set up favorable and reasonable settlements allowing people to get rid of from their credit report their bad account which enables them to purchase automobiles, homes, as well as other assets. Being able to settle these delinquent accounts make available more money that is spent in the economy, improving the economic conditions of many.
Debt collection carried out by a debt collection agency can impact the economy in a positive and fruitful way. When individuals who have debt accounts to be collected are dealt with respect and dignity, the more will they be compelled to pay, providing a positive impact on the economy all together.