A lot of people look at debt collection in different ways. For some, a simple phone call is enough to ensure all debts are paid whereas for others the simply stop picking up the phone.
Usually, a creditor will only pass on your debt to an agency when you are significantly late in paying your bill. That can be around six months but it is the creditors prerogative, they could always call them in a day after you miss the payment but they usually will give you several opportunities to pay the bill.
Of course, each month where you are not paying means that your credit report will be suffering and once the debt is sold on to a debt collection agency that is classed as a serious black mark. These stay on your credit report for seven years and will affect any further credit approval.
Companies have to follow strict guidelines
Having a stranger ring you and hassle you for money can be scary, but there are strict guidelines that these companies have to follow. For instance, they can only call you between 8am and 9pm and are not allowed to use abusive language. Neither are they allowed to contact you at work. If you feel that they have abused any of these rules you can contact the Consumer Financial Protection Bureau to take things further.
What you will need to remember is that once you have been contacted by a debt collection agency the debt is now there’s. This means that you cannot go back and pay your original provider. If you are quick to pay the debt collection company then you could always ask for a goodwill deletion which will remove the information that the debt has gone to a collection agency, although it will still show any defaults that you have previously made.
Negotiate a payment plan
If you don’t have the money to pay off the debt in full then are several ways you can interact with the debt collection agency. This includes negotiating a payment plan, but you will need to make sure that this is something you can keep up or you risk falling behind once again. If you can’t come up with a lump sum and a regular payment plan won’t work either, then you can try and negotiate a settlement into something you could afford. For an immediate payment, they might be more inclined to drop the debt to a lower figure.
Finally, if none of the above work. It might be better to look at debt management options to understand what sort of tools may be available such as debt consolidation, debt settlement or even bankruptcy.
The biggest thing is that if you can communicate with your creditors or the debt collection agency, they are likely to be much more lenient. If you refuse to answer the phone or any other correspondence, that is when things can become a lot more difficult. Any delay in communication leads to a further black mark on your credit report which you may need in the future to secure additional finance such as credit cards, loans, and mortgages.