Having debt is one of the most stressful things in a person’s life, however, having debt in collections can be even more stressful. If you have been behind on your debts, like credit card debt, student loan debts, auto loans or mortgage payments, your creditor may send your debts to a collection agency. The collections agency will contact you through email, phone, and mail to try and collect debts from you. Before legal or other serious action is taken there are some things you can do if your unpaid debt goes into collections.
1) Answer the Calls
The best thing you can do when your debt goes into collections is to actually deal with the issues. Try to answer the calls and figure out a solution. They may be able to help you pay off your debts sooner than you think. Avoiding the calls and emails can and will likely only make the situation worse.
2) Negotiate the Debt
The collections agency wants to collect their money and that is why they are contacting you. More often than not, those who are facing calls from collections companies do not have the money to pay back their debts. This is the primary reason that the debts went to collections in the first place. If you do not have money to pay off the monthly payment or the debt in full, you can work with the collections agency and negotiate a deal. For instance, they may require you to pay back 80 percent of the debt instead of the full amount. They may lower the interest rate and help you find a lower monthly payment. If you are able to negotiate your debt you can help rebuild your credit if you pay these payments on time.
3) Know Who To Contact
If you are able to negotiate a deal with the collections agency, you should know exactly who to contact with payment information and questions you have regarding the loan. Many times people are able to work out a deal, but then do not make on time payments because they did not know where to send the check. Make sure you have all information needed before you hang up the phone.
4) Dispute Debt
If you are receiving calls from a collector and the debts are not yours, you are able to dispute the debts. To do this, you need to mail a written letter to the agency and try to provide evidence that they are contacting you by mistake.
5) Hire An Attorney
If you have unpaid debts, you are likely strapped for cash already and the thought of hiring an attorney may be unthinkable. While this may cost some money upfront, it can save you a lot of money in the long run. If you are unable to negotiate a deal that works for you, hire an attorney to speak on your behalf and get you the best possible deal. They can make the process much smoother and save you a great deal of frustration.