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How Much Money Do Debt Collectors Make? - 11/30/2008 3:49:51 PM
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solomonsprayer
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I'm curious, does anyone know how much money a debt collector makes?
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RE: How Much Money Do Debt Collectors Make? - 11/30/2008 3:54:06 PM
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Miss Giggles
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From: MI
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They work on commission. How much I do not know.
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RE: How Much Money Do Debt Collectors Make? - 11/30/2008 4:04:14 PM
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DrIjames
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Some also get min. wage plus commission. But not all.
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RE: How Much Money Do Debt Collectors Make? - 11/30/2008 4:58:15 PM
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solomonsprayer
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http://www.budhibbs.com/debt_collector.htm
I did a quick internet search for debt collector salary and commission. ...I found that some make salary and commission and others may make mostly or all commission.
The one link above - granted it seems to be one-sided against the "bad" debt collectors - says that collectors can make up to 15-25% commission.
Out of curiosity, I made some fun calculations to see what that might be in salary.....
If you calculate (pure guess!!!....I have no idea actually) that an average debt bill is around $1,000 to $2,000 (I'm making this guess, because most people can and would want to pay a debt before it goes to collections that is a few hundred bucks...so I"m guessing that the point where some folks may have trouble is when a debt gets to be $1,000 or more ....again, I could be dead wrong too, lol.)
I know that collectors generally make the commission on last day of the month.
Say you work 5 days a week as a collector and are on a regular 9 to 5 schedule. You call someone that is actually LIVE once every half hour (leaving phone messages for all others).
40 hours a week X 2 LIVE callers per hour (1 every half hour) = 80 contacts.
Say you are able to make a collection on 25% of those you call. 25% of the 80 contacts per week is 20 people.
If the average debt is $1,000 per person, then it would be $20,000 per those 20 callers a week who agree to pay something. Say on average, the live callers you are able to collect on agree to pay 10% of their total debt that month (since most probably can't pay up that much ...that's why they are in DEBT!). ...10% of $20,000 = $2,000.
If this is an ideal scenario. ...That's $2,000/week you are brining in. ....$8,000/month.
Your 15% commission out of the $8,000 would be $1,200/month.
Wow, that stinks.
For a year, you'd make $14,400? ...Ok, this is obviously not right.... Perhaps collectors make more contacts on average per hour and they get more to pay......Also, if they set up a payment plan, then while they are making new contacts and people who pay, their OLD clients are also making payments.......
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RE: How Much Money Do Debt Collectors Make? - 11/30/2008 5:07:16 PM
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solomonsprayer
Posts: 866
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To follow-up on that post above, I also saw that collectors have high stress and high turn-over at their jobs.
That must stink to have to work under those stressful conditions. It's probably like a car salesmen or a stock broker. Only the best of the best can make a living out of it.
But I would think a debt collector has an advantage in making money. Not that they have the highest ceiling for income of sales people ...that would probably be stock brokers by a longshot...the good ones can make millions, but I mean.....the debt collectors at least have people that owe something to work with. Stock brokers and car salesmen don't have that luxury. If they want to make the sale, they have to really get the person to be convinced they should buy it...
Just speculation... 
(p.s. ...Yes, I did look into whether I'd be good at becoming a debt collector. I'm still looking around at various jobs. This one seems not too bad if you can handle the volume of calls and ups and downs. Salary seems kind of scary on commission. But otherwise, you don't ned to be a rocket scientists, nor do you need to do heavy or difficult physical labor other tan lifting your phone up and sitting in a chair all day. I'm guessing there are no employee benefits though.)
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RE: How Much Money Do Debt Collectors Make? - 12/5/2008 2:46:10 PM
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journeyman7
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My brother in law and sister in law are both in the debt collection business. I am sure it varies from place to place but it is a very commissioned based type of job. They make $8 or $9 per hour but make all the real money in commission.
As far as liking the job, they do not. They work in a debt collection firm and look at it merely as a job and would leave if they could find something else. The field has a high turnover to say the least. Any job has its repetition and less than glamorous tasks, but they are on the phone all day, etc.
Another item to consider before taking a position as a debt collector is the taxation policy. Commission is taxed at a much higher rate than normal wage/salary compensation; it is considered as a bonus type of compensation. For instance, after taxes, my brother and sister in law only net about 65 percent or less of the actual commission. This is something to take into account.
I faced this heavy taxation when I was in sales. I would only net 60 percent or so of my commission gross due to higher taxation, which makes a huge difference.
Hope this helps,
_____________________________
Mt 16:24 -
Then Jesus said to his disciples, "If anyone would come after me, he must deny himself and take up his cross and follow me
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RE: How Much Money Do Debt Collectors Make? - 12/7/2008 10:04:49 PM
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solomonsprayer
Posts: 866
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quote:
ORIGINAL: journeyman7
My brother in law and sister in law are both in the debt collection business. I am sure it varies from place to place but it is a very commissioned based type of job. They make $8 or $9 per hour but make all the real money in commission.
As far as liking the job, they do not. They work in a debt collection firm and look at it merely as a job and would leave if they could find something else. The field has a high turnover to say the least. Any job has its repetition and less than glamorous tasks, but they are on the phone all day, etc.
Another item to consider before taking a position as a debt collector is the taxation policy. Commission is taxed at a much higher rate than normal wage/salary compensation; it is considered as a bonus type of compensation. For instance, after taxes, my brother and sister in law only net about 65 percent or less of the actual commission. This is something to take into account.
I faced this heavy taxation when I was in sales. I would only net 60 percent or so of my commission gross due to higher taxation, which makes a huge difference.
Hope this helps,
Great stuff journman. Thanks for the info. and esp. the tidbit about taxes. That's a definite concern.
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