How Much Do Debt Collection Agencies Cost?

Reclaiming debts can be a challenging business. But how much do debt collection agencies charge for their services? Here's what you need to know about the cost to hire a collection company.

Compare Prices for Business NeedsAre you chasing up on debts and finding it hard to work out the best way to recoup your money?

You’ve probably heard of or considered the option of debt collection agencies. But you’re now wondering how much that sort of service will cost, right?

Well, we are here to provide the answer.

Collecting debts is a difficult task to undertake, especially if it is taking focus away from your normal business tasks. By investing too much time in chasing debts, it can end up costing you and your business more than the value of the debt. But that’s not to say you should give up.

This is where debt collection agencies can work well. You outsource the task and use your time and energy to focus on what you really need to be doing.

But this only works if the investment in a debt collection agency will pay off financially.

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How Much Do Debt Collection Agencies Cost?

There are a few different factors that go into working out how much you will be charged for debt collection services. Here are the main ones:

  • The size of the debt
  • Whether you have multiple outstanding debts
  • Whether you can guarantee future debt collection work
  • The size of the debt collection agency
  • The fee structure you and the agency agree on
  • The length of time the debt has been owed

Let’s break these points down a little now.

Size and Number of Debts

Debt collection agencies will only make a profit if the collectible debt is large enough for them to take a cut. So, if a debtor owes you $10,000, it will be worth their while to invest time and resources in getting that back.

On the other hand, a one-off $100 debt is not as worthwhile.

However, if you are owed a lot of smaller debts, this may be a viable proposition for a debt collection agency. This is because they could make a small profit on each debt over a longer period of time and eventually make it profitable.

The Size of the Debt Collection Agency

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The size of the debt collection agency will determine the number of resources available to make debt collection easier or more difficult.

For example, a small debt collection agency may have to do a lot of the collection work manually. This means they will take time to call and visit the debtor. This is more intensive work and will cost more.

On the other hand, a larger agency will have more streamlined processes in place. For example, they will have more automated systems and technology to make it faster to locate and communicate with the debtor.

Fee Structure

There are different ways that you can pay fees for debt collection, which will determine the overall cost. The three main fee structures are:

  • The upfront fee for a single collection
  • The upfront fee for a specific number of collections
  • A percentage of debts collected

The upfront costs will usually be a reflection of the value of the debts themselves.

The percentage fee structure will usually range from between 20% to 50% of the value of the debts.

Age of the Debt

Lastly, older debts are generally harder to collect. This is because debtors may have moved, be harder to contact, and more resistant to paying.

Because debt is harder to collect, the percentage will be higher.

Debt Collection Agency List

Different debt collection agencies specialize in different debt sizes and recollection strategies. Let’s look at some of the main agencies and their pricing.

Summit Account Resolution

debt collectionThis is a national debt collection agency offering both B2C (Business to Customer) and B2B (Business to Business) collection services.

Having been around since 1996, Summit has built up the resources to facilitate the collection of a large number of debt types. Their fees range from 7.5% up to 50%.

The pros of Summit are that they advertise not using aggressive tactics in collecting debts, which means that you won’t ruin customer or client relationships.

They also provide information for businesses on debt-related topics. For example, they provide advice on red flags to look for when dealing with new customers.

Capital Management Services L.P.

Capital Management Services holds an A+ rating from the BBB (Better Business Bureau), a certification for business trustworthiness. This is an important criterion for debt collection agencies because they must always comply with relevant federal and state laws in fairly collecting debts.

Capital Management uses advanced AI technologies to assist with debt collection.

Capital Management does not publicly publish its fee structure. However, given their large capacity and resources, you can expect your fees to be scaled back if in large volume.

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Prestige Services

Specializing in B2B debt collection, Prestige Services is another agency with an A+ BBB rating. Prestige has a minimum debt value of $200, but scales up to large-sized debts.

They advertise a 25% commission on debts up to $3,000 and 22% on debts up to $20,000.

One added bonus of Prestige is that they offer services free if the debtor pays the debt within 10 days of contact.

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Rozlin Financial Group

Rozlin is a relatively new agency, being established in 2008. Rozlin’s fee structure has an added bonus of not requiring payment until debts have actually been recovered. They do have a minimum of 5 debts to be collected.

In general, a bad debt collection agency will have larger upfront fees and a limited guarantee of recovery. So, this kind of free structure can give you confidence.

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Rocket Receivables

Rocket Receivables has a unique fee structure. They require upfront payment on each debt but 100% of the value of the debt is returned to the business. The upfront cost varies but should be less than $25 per debt.

If debts cannot be recovered through standard processes, the fee structure switches over to a percentage system.

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Debt Collection Is about More than Money

You should now have a good idea of how much debt collection agencies charge, and you’re probably now asking: What’s the best debt collection agency near me?

But, if you have any doubts about the fee structure of a debt collection agency, keep in mind that it is always going to be a balance between risk and reward.

You need to collect your debts so that you can generate cash flow. But you also need to collect your debts to let your customers and clients know that they are expected to pay on time.

Once you have worked out exactly what the value of those two things are, you can estimate how much you can afford to pay on debt collection.

If you have found this information useful, why not check out some of our other great articles on business services and costs?

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What You Need to Know About Debt Collection Cost

Save MoneyCommercial Litigation – Business to Business Debt Collection Costs These costs apply if your complaint is based on an outstanding invoice that is unpaid and no enforcement action is needed. However, if the other person disputes your complaint at any time, they will discuss what work needs to be done and offer you revised estimates if appropriate, which may be on an hourly rate (e.g. $75) or on a fixed price (e.g., $500).


Debt Collectors and Legal Help – The actual process of collecting money from debtors can take a lot of work and costs and may require hiring the services of a debt collection company. These companies often charge either an hourly or monthly rate to cover the cost of their service, although there are also companies that have their own individual agents who work independently.

When using a debt collection company, the process is to hire the company to take action against your creditors and to then negotiate a settlement. The settlement will typically include some type of credit counseling, where the debtor can learn more about managing his or her finances and how to avoid falling into debt again. Some people are simply unaware of how to manage their money, and when this happens, they need the help of a debt collector to get the ball rolling to prevent it from happening again.


Negotiating settlements can be done privately between the debt collection company and your creditor on your own. However, many creditors do not want to go through the hassle of going through the process themselves. They also want to make sure that the debt collector gets paid off in full each month, because they do not want to get into the trouble of paying the debt collection company and having nothing to show for it. This can be the last thing you want to deal with after dealing with a lot of different collection costs over the years.


It is important to do some homework before signing on with any reputable debt collection company. Check to make sure they have experience dealing with your type of debt, that they have the tools to effectively collect and analyze your debt, and that they have an excellent reputation with their current clients. Also, keep in mind that it is possible to pay out-of-pocket to hire a debt collector, as opposed to hiring one on a fee basis.

When deciding how much you want to pay out of pocket to hire a debt collector, consider what the best option is for you, whether it is an out-of-pocket expense or hire a professional to do it for you. Either way, make sure you have enough funds available to cover both the cost of collection and the cost of the debt collectors' work, and that the debt collection company is willing to work with you to settle your debt. The more money you have to pay upfront, the less you'll have to spend to keep the collection costs down.

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