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If your debt has been passed to collections, you might be wondering:
Why are these people chasing me for money they didn’t even lend me?
The answer is simple: profit.
Debt collectors are in business to make money. But unlike your original creditor, they didn’t give you a loan or line of credit. They either bought your debt—or were hired to collect it. That difference changes how they operate and what options you may have.
🏷 How Debt Collectors Make Money
1. They buy debt for less than it’s worth
Collectors often purchase unpaid accounts in large batches for a small percentage of the balance. For example, a $1,000 debt might be bought for $100. If they collect even $300, they make a profit.
2. Some work on commission
In other cases, collectors don’t own the debt. They’ve been hired by a creditor to try and recover it—and they only get paid if they succeed. That’s why some are aggressive. Their paycheck depends on getting you to pay.
3. Settlements still make them money
Because collectors didn’t pay full price for your debt, they can afford to accept less than the full amount and still profit. A $1,000 balance settled for $400 could still be a win on their end.
💡 What You Can Take Away From This
Collectors aren’t chasing you out of principle. They’re trying to hit financial goals.
That means you often have more negotiating power than you think. Especially if:
- The debt is several months (or years) old
- You’ve received multiple notices
- You show willingness to pay something, just not the full amount
🛠 How Relief Helps
Relief takes the pressure off. We work with collectors to help you request a lower balance without the back-and-forth.
If they accept your offer, we show you the terms in the app so you can take action with confidence. No phone calls. No awkward conversations.
⚠️ Disclaimer: Relief does not provide financial advice. The information in this article is for educational purposes only and should not be considered a substitute for professional financial guidance. Please consult a certified financial planner or advisor for personalized support.
Links to external websites are provided for convenience and informational purposes only. Relief is not affiliated with these third-party sites and does not endorse or guarantee the accuracy of their content.
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