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Different Types of Debt Collection Agencies


There are a few different types of debt collection agencies out there. Some agencies might not fit neatly in a certain category, but for the most part a debt collection agency will be one of the four types listed below. Let’s take a look at each one, and what makes each one of them different!

Different Types of Debt Collection Agencies

We’ve broken down the types of debt collection agencies into four categories: Internal, Traditional, Legal, and Buyers. Each is distinct either in their affiliations, organizations, costs, and business purpose.  


It might be a stretch to call organizations like this actual debt collection agencies. More accurately, outfits that fall into this category would be called departments. This type of debt collector is either a part of, or directly affiliated with, the company hoping to collect on outstanding debts. 

Large companies often have their own internal debt collection departments. For small to medium sized organizations, having an entire team on payroll just to collect debt isn’t feasible. That’s why they turn to our next 3 categories!   

Traditional Debt Collection Agencies

A traditional debt collection agency acts as a third party to collect debt from debtors. Smart companies who are tired of chasing debt down personally and don’t want to fund an entire debt collection department, will outsource the responsibility to a traditional debt collection agency. 

These agencies will contact debtors on their client’s behalf and will attempt to collect in full. While these types of agencies can be more effective than internal debt collectors, they lack sufficient enforcement measures. Often, they are unable to even reach the debtor because the debtor won’t respond to the collection agency’s letters or calls.

Since they lack the ability and experience to get the legal system involved in these cases, the rate of return for the traditional collection agency (e.g. “call center”) is exponentially smaller than what a legal debt collection agency can bring you.

Legal Debt Collection Agencies

Legal debt collection agencies (like Gilliam & Mikula!) are similar to traditional, but with a very important distinction: they are owned and operated by attorneys, and have the full power of the legal system at their fingertips.

Because agencies like this are able to quickly, knowledgably, and effectively pursue collections via the legal system without outsourcing, this is the fastest method for collecting debt – and the one most likely to get their client a full return. 

Debt Buyers

Sometimes companies simply want to get totally rid of the debt their owed and are happy to take a tiny return on it. In that case, they’ll sell that debt to a debt buyer. Usually the debt buyer will pay pennies on the dollar to the original company for the right to claim this debt. 

While certainly the fastest way to recover some money from the debt, this is the least profitable method for the parent company.

Contact Us if You’d Like to Know More!

You have your picks of debt collection agencies, and often it comes down to what you want to accomplish. If getting the most money back, in the quickest timeframe, is your goal – we think you should turn to the experts at a legal debt collection agency like Gilliam & Mikula. If you’re ready to  get serious about collecting on what you’re owed, it’s time to learn more. We’d be happy to talk to you, so please fill out the form below to begin the process!

Gilliam & Mikula is centrally located in Richmond, Virginia, and serves clients throughout the Commonwealth of Virginia. Our attorneys have over forty years of combined experience in various practice areas, representing individuals and businesses. We are licensed to practice in all General District Courts and Circuit Courts of the Commonwealth of Virginia including, Central, Tidewater, and Northern Virginia areas.

The attorneys at Gilliam & Mikula are here to smoothly guide you through the “legal maze” and ensure that you achieve the most favorable outcome.

The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only.  Information on this website may not constitute the most up-to-date legal or other information. 

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