Debt Collection Service Agreement

Debt Collection Service Agreement

Debt collection is a process of recovering unpaid debts from individuals or businesses. This process can be complicated and time-consuming, which is why many creditors choose to use the services of debt collection agencies.

If you are a debt collection agency, it is crucial to have a written agreement with your clients. A debt collection service agreement outlines the terms and conditions of your services, including the payment structure, collection practices, and client responsibilities.

Here are some key elements to consider when drafting a debt collection service agreement:

Scope of Services

The agreement should clearly state the types of debts that you will be collecting, the geographic area you will be servicing, and any limitations or exclusions that may apply. It should also outline your responsibilities, such as contacting debtors, sending notices and invoices, and reporting to clients.

Fee Structure

The agreement should include a detailed fee structure that outlines the costs associated with your services. This may include contingency fees, hourly rates, and any additional expenses that may arise during the collection process.

Collection Practices

The agreement should outline your collection practices, including the methods you will use to contact debtors, the frequency of contact, and any limitations on the types of communication you will engage in. It should also outline your compliance with any relevant laws and regulations, such as the Fair Debt Collection Practices Act (FDCPA).

Client Responsibilities

The agreement should outline the responsibilities of your clients, such as providing accurate information about the debt, notifying you of any payments made directly to them, and cooperating with your collection efforts. It should also include any requirements for documentation or information that you may need to successfully collect the debt.


The agreement should include provisions for confidentiality to protect both your client’s information and the debtor’s information. This may include agreements to keep all information confidential, including debtor information, unless required by law.


The agreement should outline the circumstances under which the agreement may be terminated, such as non-payment of fees or breach of contract. It should also include provisions for severability to ensure that if any part of the agreement is found to be invalid, the remainder of the agreement remains intact.


A clear and comprehensive debt collection service agreement is essential for protecting the interests of both your agency and your clients. It ensures that both parties understand their respective roles and responsibilities, and provides a framework for the collection process. By following these guidelines, you can create a strong debt collection service agreement that will protect your agency, your clients, and your reputation.