4 credit report mistakes you must avoid

 A credit score represents your financial health, so it's important to develop adequate credit practices to construct and retain a sound credit record.

It's equally essential to understand and dodge common credit blunders that can hide your headway and also harm your credit score for the long term. As you know about the additional aspects that impact your credit score, you'll have a fair possibility of accomplishing your credit goals. Sometimes due to chaos, negligence, or ignorance, credit errors occur.

Have a look at 4 of some really common credit mistakes, to avoid them in future:

1. Not keeping a check on your annual credit reports

Don’t presume that your credit is in adequate condition just because your credit score was great when you later applied for a loan. There could be blunders on your credit report that you might have neglected some or the other time.

Blunders in your credit report can harm your credit score and boost the interest on your loans. Hence, make it a practice to inspect your credit report every month and dispute the mistakes, if any, with the credit departments directly.

2. Delaying payments

If you missed a payment by more than a month, then your credit score gets extremely affected. Hence, you must adhere to the schedule every month to assure you make payments on time.

Put a reminder or automated pays for loan and credit card settlements.

3. Only paying the minimum amount every month

The higher the credit you drag, the more rate of interest you end up spending. Hence, it’s adequate to settle the credit totally every month. But if you are financially fit, then don’t just pay the basic minimum amount, either pay your whole credit each month or pay the maximum you can to settle.

4. Sealing a credit card

Holding more than one credit card is a good idea until you utilise your credit cards smartly and soundly.

If you seal a credit card, specially your old card, you lessen the length of your credit record, boost your credit utilisation proportion and lessen your credit score.

These points are some of the most typical credit errors people do. Before applying for a loan or credit card, make sure that you see the offers from multiple lenders and providers to reach a sound conclusion. And constantly work on enhancing your credit score if you want more profitable discounts. The faster you form adapt these practices and dodge credit mistakes, the effortless it will be to resume those manners over time. 

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5 Effective steps for success debt recovery

 Debt recovery is necessary to improve cash flow. In debt recovery, a third party acts on behalf of the creditor to recoup the money owed by the debtor. In simple words, Even after being contacted by the creditor if the debts are not paid off then the creditors enlist third-party debt collection services to help recover the debts. 

Every Industry has its way of performing debt recovery.

Here are 5 effective steps to efficiently recover debts:

1. Have Detailed Information:

Before having initial contact with the customers, it is necessary to know every detail about the customer which includes the name of the company, location of the customer, past experiences, and work history of the accounts. Also, have copies of all the invoices and other information that would help you create a personal connection with them.

2. Avoid conflict and visualisation:

Debt recovery is not easy. We must acquire skills to note when the debtor acts reasonably. Your intuition might work perfectly here, for instance, if the debtor blames other people then you must have a word with them and clarify the same immediately, and based on what the other person is saying you can know if he is being honest or not.

 

3. Have quality documentation:

One of the most important aspects of debt collection services is documentation. Documentation helps in determining accounts collectability. While talking about debt recovery take a detailed note to avoid future disputes. Having all personal information about the customers might increase your chances for debt recovery. Also, we must have account statements, personal guarantees, credit reports, and copies of invoices.

4. Stop assuming and Start communicating:

Credit reports India says debt collections have assumed that the debts have not been paid. but we must never forget that  

there may be a potential future business with the customers. Therefore, we must be very careful with the tone and word usage. communication must be going on even if the customer is not able to pay off the debt currently yet, he might be able to pay you sooner or later. Effective communication plays an important role in debt collection services. 

5. The course of action:

Last but not least, By now you must have known that debt recovery is not easy and if the debtors had money it would not be difficult to recover debts. Now that they are not able to pay off the debts, have effective communication and work on a plan that would benefit both parties. 

Debt recovery is day by day becoming difficult. Consider the above techniques, it would surely lead you to a successful debt recovery.

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Some Widely Used Debt Terminologies and Their Meanings

Bill payments and managing finances along with debts ain’t an easy task. And if you are someone who struggles with complex debt terminologies, it is only going to get tougher. There are times when you also might get confused between debt collection services and credit bureaus. There are various terms that banks use which might leave you perplexed. To make it a little easier for you, we have discussed some widely used Common Debt Terminologies.  

• Credit Report- A credit report is a document that contains details about your credit history and current credit position, such as loan repayment history and account status. Credit reports include details like personal information, credit line details, public records such as bankruptcies, and a list of businesses that the consumer owns. The credit bureaus compile this information in credit reports. The majority of individuals have multiple credit reports. 

• Debt Collection- The process of collecting debts owed by individuals or corporations is known as debt collection. A debt collection agency or debt collector is a company that specialises in debt collection. There are various companies working as agents for creditors. They collect debts in exchange for either fees or a fixed share in the remaining amount. Debt recovery and debt collection are similar phrases with one significant difference. The distinction lies in who is attempting to collect a debt. Debt collection services operate at different scales, varying from operating independently to functioning for attorneys. 

• Annual Percentage Rate- The APR (Annual Percentage Rate) is used to calculate the annual total cost of credit. It considers the amount borrowed, the interest rate(s) as well as the amount and time of payments. APRs can fluctuate based on several factors, such as broader market movements, the account holder's actions, and other variables. 

• Credit Limit- The phrase credit limit refers to a financial institution's maximum amount of credit to provide to a customer. Generally, the lenders set the credit limit, which solely depends on the information provided by the credit applicant. A credit limit impacts consumers' credit scores and their capacity to receive credit in the future.

• CFPB-The Consumer Financial Protection Bureau (CFPB), also known as the Bureau of Consumer Financial Protection (BCFP), is a US federal body responsible for financial consumer protection.

• Debt Consolidation-  Debt consolidation allows one to manage several debts all at once. It allows the users to combine several debts into a single loan, given they are paying multiple debts. 

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Business Information Report: Everything you need to know

Business reports, regardless of size or industry, are vital tools for any company. They allow you to track and analyse the performance of the company, as well as uncover areas for improvement and growth potential. A method of borrowing money with an understanding that the borrower will pay later is called credit. Buyers and suppliers can both apply for credit. The buyer does not pay for the goods right away but rather over a specified period of 30-60 days for providers. In India, the companies that act as an observer for your credit are called Credit Report Services India. 

What is the Business Information Report?

When you owe someone money, you are subject to credit chance, which is the risk of losing money if they do not repay you. When you run a business, you deal with different people and have exposure to different credit risks.

Whether buyers or suppliers pose the risks, the only way to minimise them is to have a clear, up-to-date understanding of each organisation's risks. To accomplish so, companies use a Business Information Report to gather data. 

What are the benefits of a Business Information Reports?

• A business information report includes financial statements, lines of business, payment terms, the company's history, ownership data, operational information, negative occurrences, legal cases, and details on linked firms and any noteworthy events involving the company's management in the past.

• When checking out a potential business partner, business information reports are a valuable tool for ensuring compliance. A compliance report can assist you to figure out whether any of your business partners are committing financial fraud. 

• The primary purpose of a business report is to provide a critical assessment of a company's performance across all the departments. They are crucial tools guiding the process of decision-making and providing opportunities for business owners and senior management to explore and resolve any concerns.

• Business information reports are also beneficial for debt collection services. Accessibility to all the related information can help debt collection companies avoid reputational, operational, financial, and legal issues. In addition, the data can assist you in determining loan terms, evaluating distributors, agents, buyers, and suppliers, calculating profitability, and evaluating new customers.

Looking for the most profitable and suitable proposals from your debtors? Hire our expert debt collectors today!

What are the challenges faced by debt collectors?

The process of debt collection can be exasperating and bothersome, especially if there is no coordination and communication between the debt collector and debtor. Private companies are often hired by creditors to collect overdue payments on their behalf. Such companies are called 3rd party debt collection agencies. According to Credit Reports, India, the majority of challenges faced during the process of debt collection arises from faulty written agreements, oral contracts and failing to make payments at the required time, etc. Despite the availability of surplus information, debt collection services India are facing multiple challenges due to changing technology, legislation and demographics.

Let us look into a few such challenges faced by debt collectors-

Unavailability of updated information about the debtors

In quite a few scenarios, many debt collectors waste their time calling debtors who have already paid off their debts. If there is no updation of information regarding debtors who have already paid their dues in the public and digital record, it can lead to wastage of time and money for both borrowers and debt collectors. 

 

Oral contracts and faulty written agreements

In India, many creditors enter into an oral contract while lending money to the required customers. Since written records are not available, debt collectors face difficulty retrieving the given amount from debtors because there is no evidence. Moreover, it will be more burdensome to pursue legal action because of the unavailability of tangible records. Similarly, poorly drafted written agreements can also cause problems for debt collectors. Vague and suspicious terms in the contract can be used against the debt collectors and creditors. It can also lead to the cancellation of the contract causing a loss of money and time for the debt collectors. 

 

The bankruptcy of the borrower

In the process of debt collection, when money is lent to the debtor, collaterals are kept for the safety of the creditor. Hence, after attaching the asset or getting the collateral, the creditor has the right to receive money. However, if the debtor becomes bankrupt, the debt collectors face a tedious challenge while recovering the indebted money. 

Looking for the most profitable and suitable proposals from your debtors? Hire our expert debt collectors today!

What are the rights of a debtor in India?

A debtor, also known as the borrower, is a legal entity that owes money to individuals or financial institutions. The individuals or financial firms that lend money are called creditors. In the process of debt collection there is always a formal agreement between the creditor and debtor regarding the payment, period, discount deals, etc. Failure to uphold the terms can lead to fines and penalties. Moreover, if the debtor fails to pay or keep up with the terms of debt collection, creditors can bring them to court for judicial action. However, if a debt collection agency deploys unethical and dishonest methods during the process of debt recovery, debtors can sue creditors for unfair debt collection practices. 

Let us look into a few such rules and regulations that will protect debtors from unethical debt collectors-

1. A debt collection agency cannot abuse, or harass or humiliate the debtor using obscene or profane language. Both debtor and creditor must be treated with respect and dignity. There should not be any use of violence or threats in debt collection practices.

2. Unless it is the suggestion of the debtor, a debt collector should only call the borrower between 7 AM to 7 PM.

3. A debt collection agency cannot misrepresent the overdue amount or claim false allegations against the debtor. 

4. There should not be the usage of unfair debt collection practices against the debtor. For instance, debt collectors cannot collect undue payments or fees from debtors. 

5. There should be respect for the privacy and personal space of a debtor. Physical distance must be maintained between the debt collector and borrower without invading their privacy in the process of debt recovery.

6. The terms and agreements of debt collection should only be discussed with the debtor or co-signatory. A debt collector cannot discuss the terms with anyone else besides the borrower. 

7. A debt collection agency should only meet the debtor at the billing address. Unless an alternate address has been provided by the debtor, debt collectors cannot visit them at their workplace or any other venue. 

8. All questions and doubts about the terms of debt collection must be answered by the debt collectors. If the debtor requests to speak to the supervisor, his request must be complied with by the debt collector. 

9. If a debtor is lagging behind the payments, the creditor can call the debtor at a reasonable frequency to inform about the payment history and overdue amounts. However, calling multiple times or back to back calls are not encouraged and can be considered harassment. All calls regarding the debt collection must be recorded and logged by the creditor. 

10. A debt collector must seek permission and look for the convenience of the borrower to converse about the overdue payments. Debt collectors cannot force their way into a conversation with debtors.  

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Unfair debt collection practices you should be wary of

Repaying your loans and credit card EMIs is very important and needs to be prioritised. But under certain unforeseen circumstances, it can get difficult to pay back your dues. Such instances inadvertently put you at the receiving end of a debt collection agency. While the experience of being in debt can cause a blow to your credit reports India certain other factors might worsen your situation. Here are some unfair debt collection practices that you need to be wary of if you miss out on paying your dues.

False pretence of being a government official

It is common knowledge that people are more prone to listen and follow instructions if the one giving them is a government official. This could be the reason why a debt collection agent might falsely claim that they are also a part of the government even when they are not, so they can make you pay your dues back quicker. You must try not to fall for such gimmicks.

Harassment to get money

A major factor that you should be aware of and take action against is if the debt collection services appointed by your creditor threaten to become violent, use obscene or profane words, or participates in any other criminal activity that could harm your personal well being and reputation. You are liable to receive warnings via calls, messages, or emails that ask you to pay your dues, however, any kind of harassment to your physical and mental health in that prospect is not acceptable.

The threat of an arrest

When you are indebted to the creditor, it might be easier to believe that you could be arrested if you do not pay the dues back on time. While the process of debt recovery includes legal letters, it does not mean that you can get imprisoned directly without any legal conflict. Whether you have personal debt or your business is lacking in paying its dues, make sure to check your accounts or business information reports and pay the receivables on time to avoid any legal battle with the creditor.

Looking for the most profitable and suitable proposals from your debtors? Hire our expert debt collectors today!

Top Debt Collection Agencies in India

 Debt collection is a procedure that involves the unprejudiced and ethical pursuit of delinquent amounts and past-due payments from indebted individuals or businesses on behalf of the creditor. These delinquent amounts include unpaid bills and overdue loans like credit cards and utility bills as well as automobile and student loans. Creditors hire private recovery agencies to collect debts in the majority of the cases. If there is the involvement of a debt collection agency the whole process of debt recovery falls under the interlocutory debt collection procedure. The laws and regulations followed by debt collection agencies vary in different countries. 

However, in case of complications, credit report services India and debt collection agencies rely on lawyers for negotiations. With regards to debt collection service India the recovery procedures are pretty simple and rapid. Debt collection agencies in India have skilled debt collectors and attorneys for the faster procurement of payments from debtors. Here are few debt collection agencies in India-

ARRMS (India) Private Limited

By focusing on strategically timed and proactive legal action, ARRMS (India) Private Limited provide complete debt recovery solutions. They also adhere to all regulatory, judicial and statutory guidelines. They rely on traditional debt recovery methods like telecalling and field visits with interlocutory interventions. 

Direct Recovery Associates Inc

They have the highest debt collection record in the industry. Their branches offer commercial debt collection services all across India as well as in the United States of America. They have high success rates because their debt collection standards are based on the principles of persuasiveness, persistence and professionalism.

The EOS Group

The core activities of the EOS Group include receivables purchasing and debt collection. Even though their headquarter is in Hamburg, Germany, their outlets operate in more than 25 countries. Their expertise is a fusion of national and international markets with a broader focus. 

Afford Motors India Pvt. Ltd.

Founded by Mehar Yadav in 1996, Afford Motors India Pvt. Ltd. is one of the efficient and well-established debt collection agencies in India. The agency offers comprehensive debt recovery methods along with receivables management solutions. 

Looking for the most profitable and suitable proposals from your debtors? Hire our expert debt collectors today!

How to deal with third-party debt collectors?

Having overdue credit payments is a stressful aspect, which worsens when your creditor hires the services of a 3rd party debt collection agency. You might start getting calls, messages, and emails regarding your payment. If not handled correctly, agents might even visit your address looking for payment. In times like these, you might find it difficult to manage the situation, while also trying to pay back the due amount. So what is the right way to handle a third party debt recovery agent? Let’s find out.

Do not ignore 

You might tend to avoid the calls or any sort of communication made by a debt recovery agent. However, that could worsen your credit scores and might also push the recovery services to opt for stringent measures if you haven’t started paying the dues back.

Do not pay without knowing all facts

There is a possibility that you will feel the need to pay the dues back as soon as a debt recovery service professional contacts you. You might even pay according to the amount the person tells you to pay. But such a step is not advisable. Paying your dues off on time is always recommended, but you should understand the complete facts about your debt before making any such decision. The debt recovery agent is trained to get receivables from debtors in minimum time, so they might convince you to pay sooner or more than required. Get as much information as possible, know the repercussions of the payment, then start paying back accordingly.

Do not believe only in oral communication

If you make a deal with the debt recovery agent regarding your dues, ensure that the agreement is made officially in writing, so there’s a paper trail. However, try to avoid changing the terms of the original credit agreement as best as you can, or your score under credit reports India, can get impacted negatively.

Looking for the most profitable and suitable proposals from your debtors? Hire our expert debt collectors today!

What is AR Process - A Step-by-Step Guide

 

In a business’s general ledger, the accounts receivable (AR) balance is the amount the company has given on credit to its customers. It is an asset to the business, hence maintaining the AR balance is very essential. It constitutes all the aspects of crediting, from the point when a customer applies for credit to the stage where the amount is supposed to be returned to the creditor. Certain important steps need to be followed religiously at any company so that maintaining the account receivables becomes easier. This can either be done by AR outsourcing to an external agency or keeping a track of all receivables yourself. The various steps that you can follow to manage the AR at your company are:

Establishing definite credit practices

A much-needed factor in the accounts receivables process is to maintain a credit check system. This means going through the credit history of your customers and offering credit only to those who are more likely to pay your amount back. This method can also help you determine the credit amount that can be given, the payment period which can be offered, or any discounts that could be valid for the customer. Some factors to consider in this step while checking up on a customer is their history with your business, their payment history, your competition in the credit market, and your company’s cash flow.

Sending customer invoices

Setting up an accurate and convenient format for invoices is necessary for your company and customers. Any communication, including the invoices, can be sent in various media formats at the customers’ convenience. You can even send templates so all the needed information is taken directly without any delay and the terms of payment are specified clearly in the document. Your customers should also have easy access to all invoices and other such information whenever they need it. If you need to follow the process of debt recovery later in the future, these invoices would also help keep track of all communication. Hence, your company should keep a track of all the information sent and received.

Accounting for AR

Your company’s financial statements will reflect your accounts receivables, so make sure to account for all invoices sent, such as the products or services offered to the customer, the debt owed for it, and the date on which the amount needs to be paid. Accounting can be carried out in two major methods, on accrual-basis and cash-basis. In the accrual-basis accounting, when a product is sold, it is considered as the revenue. However, in cash-based accounting, it is revenue only when the company receives the amount for the service or product.

There are various advantages to following a smooth and stable accounts receivables process. You can offer credit to trustworthy clients, build brand loyalty, and increase your sales. If things don’t go well and you do not get the account receivables from your customers, you can acquire the services of a 3rd party debt collection agency that can help get the amount back. So make sure to follow a well-planned format for accounts receivables for the benefit of your customers and your business.

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3 Major Reasons to Maintain a Good Credit Score

Any financial plan should consist of features that will help you maintain a good position in the credit reports India, while also making beneficial investments and financial choices. Making sure you have a good credit score can be a difficult task, especially if you have many debts. Managing a bad debt can be even worse as you might have to look for a settlement with the debt collection services hired by your creditor. However, making sure your credit score is high has several benefits, such as:

Better loan and credit terms and options

Many people are on the receiving end of a debt collection agency as they struggle to pay back dues they had taken as credit. However, if you have a good credit score, you can choose from a range of choices for loans, credit cards, and other credit products. This can help you compare rates and choose the most beneficial one depending on your requirement. The terms and conditions that get applied to such credits are also more lenient as compared to those offered to people with low credit scores.

Higher insurance rates

You can save a lot of money on your auto or home insurance if you have a good credit score, as the risk is lesser for the insurance company. Hence, many companies lower premiums for people with a better score. You can choose which insurance company to opt for by looking up the business information reports and finding trustworthy ones.

Increased housing choices

Maintaining a good credit score by paying off your debts and dues on time shows that you are financially responsible. On the other hand, being a victim of debt recovery services can be an unpleasant experience. In these cases, the creditor has no other choice but to opt for services related to bad debt collection. This is because an economically stable person receives various options for houses to rent or purchase as landlords or owners usually check a person’s credit score before offering them the house.

Looking for the most profitable and suitable proposals from your lenders? Hire our expert debt collectors today! 

Understanding the Process of Debt Collection

The process of debt collection has come a long way in the past decade, as compared to before when there were no laws guiding it. With the increase in creditors and debtors, some set methods and guidelines have been established, which benefit both parties. These new aspects make it easier for the debt collection agency to recover money from delinquent accounts, while also protecting the rights of the debtor. 

The major aspects of debt collection service India that you should be familiar with include: 

Dedicated account managers 

Most collection agencies employ trained professionals to recover debt from delinquent accounts. While doing so, they make one person responsible for the recovery from each account. When recovering money, it is more convenient to have one person assigned to the case, instead of a few separate people working on it. 

Multiple recovery methods 

Debt collection agencies offer various ways so a person can clear their debts with the creditor. A settlement can be worked out by an agent or legal steps can be taken, depending on the situation.

Consistent communication 

Credit report services India works on set guidelines regarding which methods can be used to contact the debtor. The collection agency can get in touch with the debtor via calls, messages, fax, email, or personal visits to the debtor's given address. Regardless of the method used, the agent assigned to the case will make sure they are in contact with the debtor during the recovery process. 

Looking for the most profitable and suitable proposals from your lenders? Hire our expert debt collectors today!

3 Services Offered by Debt Collection Agencies

Companies provide credit to people for various reasons, however, getting this amount back from the debtor can be tiresome. Usually, such companies outsource this collection of delinquent debt to a debt collection agency, which consists of trained professionals who can get the money returned to the creditor.

You can expect a few debt collection services when you approach a collection agency. Some of these include:

Credit control

If a creditor finds a debtor that hasn't cleared their debt for a long time, the task to recover this amount is usually given to a debt collection agency. This way, the creditor does not need to spend time, money, or resources to get the overdue amount back from the debtor.

Pre-legal actions

During the process of debt recovery, several issues about the debtor might come forward. For example, the debtor's address could have changed, in such case, the agency would have to trace them. The agents trying to recover the debt also need to follow legal methods and maintain professionalism while trying to do so, like conversing professionally while contacting the debtor via call, text, email, or fax. The collection might also have to send in agents to the debtor's address to collect the amount or offer alternatives so the debt can be recovered. If there is no response, official reminders and warning letters are also sent to the debtor.

Legal actions

When the pre-legal services carried out by the debt collection agency does not work out, the agency, along with the creditor, moves towards taking legal action against the debtor. This matter is then taken to court. Credit Reports India will not contain a good perspective of the debtor if the case goes to court.

Looking for the most profitable and suitable proposals from your lenders? Hire our expert debt collectors today!

What to Know Before Working with Debt Collection Agency

Since you delayed your MasterCard payment a couple of months ago. You receive many annoying phone calls from borrowers. However, you would like to find out some facts about the debt collection agency. Although many companies are working in the same field, not all collection agencies operate lawfully or under license to supply their debt collection services.

What is a debt collection agency?

A debt collection agency is a company that receives debts from businesses. Most collection agencies run their businesses as creditors’ agents. they assist creditors collect the debt allocated for an amount of the entire loan amount collected as their fees.

Some agencies also are referred to as “loan buyers”. They take loans from creditors and search for the exact amount of debt owed.

Typically, after many months of chasing without the success of debtors, creditors will allocate or sell the debt to collection agencies in a way that the quantity of this debt are often written off thanks to a loss in their records.

Things about debt collection services that you simply got to know

Those who are chased by debt recovery agencies know that they're aggressive and have a nasty reputation for intimidating and harassing debtors. Fortunately, in many nations, collection agencies are monitored by law to stop some unpleasant practices. because they are aggressive in nature, there are some activities that borrowers should remember when working with debt collection agencies.

>> Avoid lecture debt recovery agencies: The less you ask them the better. If they call you at your home, at work, or on a telephone , simply ask them to speak with you by mail, and send them a ceasefire with the mail registered with the receipt.

>> Even after you send them a mail and they still keep calling you, you should opt to tap the phone conversation. Check your state’s law to ascertain if your conversation is allowed to be recorded. Usually, once you tell a debt collector that a conversation is going to be recorded, it's likely that the phone will hang up.

>> Be conversant in the law of limitations in your state. The debt collector will keep calling you for an extended amount of time, the debt is additionally over and therefore the loan not must be repaid legally.

>> If you create any unknown payment to the debt collector, you merely confirm the loan and resume the law of limitations. Therefore, it's vital that you simply are conscious of your rights.

>> apart from the law of limitations, you should opt to learn your rights by reading the Fair Debt Collection Practice Act (FDCPA).

>> Ask the collector to prove that you simply are the author of the debt. If they fail to prove it, they’ve got no right to ask for a loan from you.

>> simply because you're in debt doesn't mean you opt to be threatened. remember the debt collection agency and be educated about your right to affect them.

Final thoughts

The debt collection agency may be a necessity in our current business scenario. While companies have always needed a set agency with increasing amounts of economic loans, debt collection agencies are even more needed. Collection agencies are called by companies that aren't ready to receive payment from the business for his or her invoices. Business loans can grow rapidly with interest charges and sometimes troubled companies will simply stop paying and suddenly find themselves unable to pay fully. When this happens, debt recovery agencies can advance.