When you fall behind your schedule to pay off your debt, you tend to be pursued relentlessly by the debt collectors. It can be stressful, and you need to mediate ways to take responsibility for the debt and deploy the appropriate steps to erase it. Debts can put undue pressure on you, and the financial woe can lead you to take desperate measures. Instead of succumbing to stress-based decisions, you must think of ways to deal with them appropriately.
You need to think about how to get out of debt collection strategically. Debts may enter into the collection stage if it goes unpaid for a period of time, generally starting 30 days after the due date. The overdue payment may get reported as delinquent. You will begin to receive calls and notices from the concerned authorities that need to receive due payments. After a period, generally post 180 days, the creditor may give up on the attempt to collect. The original creditor may then sell your debt to a collections agency for recovering their losses. If the original credit sells your debt, you will begin to receive debt collection notices from a third party that now has the right to collect the debt.
When you find that your account is in collections, you can refer to the following tips.
Do Not Ignore Your Debt
When the debt collectors pursue you, you should face their calls or notices instead of blatantly avoiding them. Evading your debts will not make them go away. You will be fully aware of the situation and confront it. It is the only way to prevent the problem from worsening and impose minimum harm on your credit. The regulatory Act stops debt collectors from using unfair, deceptive, or abusive means for collecting debts. You should not feel scared about confronting the reminders of debt collectors. Educate yourself about your rights as a debtor, and understand the Fair Debt Protection Act to know the process of proactive handling of debt collection. Learn about your consumer rights under the Act, so you know what your collectors cannot do. They cannot call you at unreasonable times, threaten you, or use obscenities.
Gather Information About the Debt
Probe more profoundly into the debt details. Do you have information about the concerned debts in your records? Or, have you never heard of it, which may turn out to be something which you do not owe. Look into your documents to see what information the report details about your debt. Request your collection agency to validate the debt. Ask them to provide a verification letter that details the original creditor’s name, collection agency, the amount owed, and various legal statements about your rights as a debtor.
Look Into Negotiating the Debt
The debt collection agency wants to get their money. You can negotiate terms with them and either make a lump-sum payment or plan to pay off the debt over a period of time. Before proceeding with the negotiation, make the necessary calculations about your income and expenses to determine how much you can reasonably pay.
Be Sure You Know Whom to Pay
Once you are ready to make payments to your creditor, ensure that you know which entity is responsible for collecting your debts. If the original creditor is handling the debt collection, then you will directly make payments to them. Or, if your creditor hires a debt collection agency or sells your debt to a debt collector, you will have to identify which third party is responsible for debt collection.
Find Your Route
For handling debts in collection, the common ways involve choosing a payoff method or disputing the debt as being in error.
- For paying your collections amounts, you can choose between various options. But, ensure that you are not giving the collector permission to access your bank account. Do not provide them with your debit card number or set up automated debits. If your payment plan involves a payment plan between you and the collection agency, ensure that you have the agreement in writing to ascertain the accountability of your debt collector.
- If the debt is not yours or if you have already cleared it, you can dispute the debt. Disputing a debt notifies the credit bureaus that you think that the reporting is inaccurate. It will lead the collection agency to stop their collection efforts and start investigating the matter. If they find the debt valid, the collector will forward the relevant documents to verify the bill. An invalid debt will cause them to stop their debt collection efforts.
Make Arrangements to Pay Accurate Debts If Possible
Once you identify that the debt is valid and need to clear it, it would be best to pay the balance. Consider other financial tools if your cash reserves are limited. A debt consolidation loan allows you to borrow money at a lower rate and pay off balances from high-interest credit with the loan. If you need to overcome credit card debt, a balance transfer credit card can help you pay what you owe.
Be aware of your debt instead of avoiding it. Ensure that you are mindful of the tips mentioned above so that you don’t end up making rash and disastrous decisions.