No, I'm just trying to make sure you don't get in over your head. I'm a collector, and I'm very successful at it. I've seen lots of people come and go, but it's a great industry if you have a knack for it and do it the right way. If not, prepare to be sued into oblivion by litigious consumers.

I appreciate more posts like this. I am going with Collector Express software. It comes highly recommended, and they offer 60 days of training and unlimited support.
I am not setup to report to credit bureaus yet, and I plan to do it as soon as I get back to Buffalo in one week.
I have looked into necessary insurance and licensing. You only need a license if you are inside the city of Buffalo proper, and I plan to be in the suburbs strictly to avoid licensing and costly bonding which is needed inside of the city.
Skip tracing is a problem. That is a very carefully vetted part of the industry. They want to see a record of reputable collecting since they are researching sensitive information. I am strictly buying debt that has already been skiptraced in the past 3 months, since I won't be able to do it myself for some time.
I have used predictive dialers myself when I cold-called selling insurance, and I think they may be counter-productive in this case. When you powerdial like that, there is a lot of dead air in between answering calls as they come in. Once they answer and hear dead air, they know to avoid that number. I would rather take more manual time and have them hear a voice as soon as they pick up, but my opinion on that may change.

You are right about having to build up a pipeline, and taking a while to collect at the rate I want. That is hopefully not going to be a huge problem, as I have 4 months of living expenses after the 20kish initial investment that I will be spending on this.

I appreciate the comments and we can be friends now??

I'm already in over my head, but I know that. I think that is one advantage I have over a lot of people that try to get involved in the industry, which is that I know how little I know. I am relying on others to really point me in the right direction in the beginning here.

Of course, never was mean to be anything different. Was just presenting some things for you to think about.

In regards to licensing. You may not need to be licensed in New York or Buffalo, but if you are collecting in other states many of them will require you to be licensed and post a bond.

Steer clear of TX and FL debt. MA sucks too because you can't solicit a post dated check.

I've already found the list of states that need licensing and bonding... there aren't toooo many if you already own the debt. TX is the worst, and I've known that for some time now. FL and MA I wasn't aware of. MA makes sense bc of that, but why FL? Short SOL or some other reason?

FL isn't worth your time because there are too many consumers and consumer "rights" attorneys that will file frivolous lawsuits.

OP have you considered maybe continuing your current career and moonlighting for a collections agency for a little while? Even 3-4 months would probably be invaluable to you.

EDIT: probably wouldn't work well if you have a day job

I actually have considered that. I'm still considering doing it for a few weeks just to get a handle on it. However, my day job as of now is selling a type of insurance that is legal in 49 states. Obviously the one state it is not legal to sell in is NY. Boo.

This might be a stupid consideration but, have you ever though of lowering your settlement rate of the debt you are willing to take? Instead of 75%, just present it and sell them on the opportunity that you are doing them a HUGE favor that they cannot pass up, and wipe their debt at 50% or even 40% etc., thus potentially increasing your success rate.

You said it was a numbers game, which clearly it is so wondering if this is a negotiable point for you in the business.

So if you called me wanting 75% and I tried to negotiate to 40% would you even work with me?

That's not a stupid consideration at all. However, the way it's presented would be a problem. If you start at 50 percent, you can collect AT MOST 50 percent. You need to start asking for 100percent and claiming that they owe the whole amount, and you're doing them a favor by working with them and not reporting it to the credit bureau after all this time/pressing charges. Then if they seem like they really do want to get out of debt you get the 100% easily sometimes. If they want to get out of debt but are legitimately pressed for cash, this is when you set up an extended payment plan. However, like it has been mentioned in this thread, these people often don't manage finances well, so it is in your interest to get it all up front. You can offer to settle for 90 on the dollar TODAY, or work your way down to 75, if they can pay right now, since a bird in the hand is worth 2 in the bush and all. Also, capital available right now is worth more than it will be in 8 months, since you need to reinvest in more debt.
That being said, collecting on PayDayLoans, I would almost never settle for 50% because there is no risk of bankruptcy with such a small debt. I would always push for a bigger payment over a longer period with that type of debtor. If I felt 50% was all I could get I would take it, but I rarely would, and it would depend on how long I have had the file and how hard I worked it. I would never take it on the first call. After I had worked the file for 2/3 months and I was ready to buy a new portfolio, then I would take it just because something is better than nothing. With the collection software I have, I can put a note on somebodies file that they want to settle for 50 on the dollar or something like that, and refuse anything else. I won't see that file again until I am ready to sell the debt... then the software will pop it up for me and remind me to call these people back and take whatever I can get in the couple of days I have left with their file.

That being said, if I was collecting on larger debts, like credit card debts with 2-10k in debt, I would be much more likely to settle, since bankruptcy becomes a legit issue with larger debts. I would also be much more likely to settle for 50 percent or less if I was buying "junk debts," or debts that are 3 years old or so. These are sold at less than 1cent on the dollar a lot of times, so even settling for 50percent is a huge coup. Some agencies make a ton of money collecting on these junk debts. However, you need many more people working them than I have, because it is truly a huuuuge numbers game. For 10k you would own literally over 2mm in debt, and collecting 1percent would make a ton of cash. For those types of debt, I would try to get the whole amount, but would get into settlement talks on the first call, because people have already tried and failed to get cash from them... any amount you can get is a success.

I guess to answer your question directly, I would personally not work with you because the debt I will own is to small for that, but if you owed a significant amount of debt I would def work with you. Also, if the debt is older than 2 years, I would DEF settle with you for way less than what you owe. Any more specifics I'd be glad to answer as well, although I am very green to this type of thing as well.

How does compensation work for people making the calls -- do they get minimum wage plus commission or commission only?

Depends on the collection agency. For prime debt or one agency debt it is normally an hourly wage with commission after you hit a goal. Currently my friend collects on prime (0 agency) paydayloans. He gets 11 dollars an hour (started at minimum wage) and 25% of any amount he collects past 15k in a month. So if he collects 16k, his bonus is 250... 25percent of the 1k he collected over 15. Lots of times with junk debt collectors work strait commission, 40-50 percent of total collected is usual. I've seen collection agencies with prime debt that pay 15-20 percent strait commission. The goal and the hourly obviously depends on what type of debt you are collecting. It's really something you can play with.
To start, I plan on paying myself and my friend a strait salary of 500perweek each. The excess money will stay in my corporate account in order to grow the company and buy more debt. I'm obviously ok with this, and he's ok with it since it works out to 12.50 an hour, and he understands that if we are successful somehow he will grow with the company and me.

Sebastian,

You mentioned collecting on payday loans. Maybe this is opening a whole new can.... but I really think offering payday loans is a good business idea. I haven't done a ton of research since I am not in the market to be self employed right now. But wouldn't this be a great way to generate cashflow fairly quickly?
You seem educated on that scene - something to consider?

Lemonzest... I'm actually not educated at all on actually offering loans. Also, I don't have enough capital to make it work for me. I could only afford to give about 20 1k loans out, and if any default I'd be kind of screwed. Way to much variance for my starting capital.
The laws on paydayloans are very iffy as well afaik. It would be a way to generate cashflow quickly, but only if you have a large amount of cash to begin with. Takes money to make money and all that. Plus, I really only know about the collection aspect.
But for a person with more money and time to research? There is a reason there are tons of PDL companies.