Having a debt fall into collections can be scary; especially if you’re not sure you can afford to pay what you owe. Many people feel embarrassed when this happens and because of that they choose to avoid or ignore the calls and letters they receive from a collection agency. Out of sight out of mind, right? The good news is you’re not alone. According to a study conducted by the Urban Institute in 2014, “77 million Americans—35 percent of adults with credit files—have debt in collections”. For such a common problem, there has to be a better way to deal with it. Ignoring the debt won’t make it go away, but you can learn how to effectively and responsibly deal with debt collectors.
7 TIPS FOR DEALING WITH COLLECTION AGENCIES
- Understand that the debt collector is just doing their job. Collection agencies get a lot of criticism these days, but it is important to remember that the debt collector is a person just like you. They did not single you out to try and make your life difficult; they are just trying to do their job and provide for their family.
- Know the law. Part of the reason debt collectors are under fire is because there are some less than ethical agencies out there that do not “follow the rules”. Make sure to read up on the Fair Debt Collection Practices Act (FDCPA) to know what they can and can’t do. Knowing your rights will give you the power to stop debt collector harassment and assure that your debt is dealt with justly.
- Check the facts. If you do not recognize the debt in question or just want to confirm the amount owed, you have the right to ask for written verification. Upon request, the debt collector is required to send you an official written notice through the mail containing all the information about the debt they are trying to collect.
- Don’t give the debt collector the cold shoulder. Ignoring your problems never solved anything. If you choose to dodge phone calls and ignore notices, the collector may have to use other means to get in contact with you. In extreme cases, this can even lead to legal action.
- Work together to devise a plan. A debt collector’s job is to recover the money a collection agency is owed. If that means working with you to develop a manageable payment plan, they are usually more than willing to oblige. Talk with your collection agent to see what options may be available.
- Use your negotiating skills. Cash in hand is a powerful negotiation tool. If you are able to pay a reasonable portion of your debt in a single transaction, your collection agency may be willing to accept a settlement. They receive valuable cash flow and you get part of your debt forgiven in return. Click here to find out more about Debt Negotiation.
- Finally, don’t get emotional. While having a debt in collections can be an emotionally trying experience, when you are dealing with debt collectors you should try your best to remain calm. Remember that this is a business transaction and keeping your emotions in check will allow you to think clearly in order to devise a solution.