What Should You Do When You Are Sent To Debt Collectors?

Each month, there are a number of bills that we have to sort and pay on time. These bills include regular household activities as well as repayments for the various loans we have borrowed over the years. For many reasons, you might not be able to pay one of these bills on time. Once you default on the monthly payment, it is up to the organization to whom you own the money, as to what action needs to be taken.

Mostly, if you default for several months, you will receive a notice and their bills are sent to collections. This means that this party is now involved and is trying to retrieve the money from you. This is rarely the case if you forget to pay your bill just for a month. But if repeated over a few months, you are bound to get such a notice. Generally, credit card companies and lenders are the ones who send you to collections.

Getting sent to collections can deteriorate your credit score to a great extent and if you still don’t pay, you can even be charged legally. Here is what you can do if you are sent to debt collectors

Be Aware Of The Amount You Owe

Be Aware Of The Amount You Owe
Source: Bankrate

Before your account is sent to collections, you will be issued delinquent notices as a warning. Usually, these notices from your creditors provide a 30-day period for you to pay the debts failing which your account will end up in collections.

While these notices are often unreported for sums of money that are pretty low, you should not rely on that. Find out the total amount you owe and try to pay it off in the respite period. If you’re unable to pay the sum in full, get a hold of your finances within a couple of weeks and try to pay at least the minimum amount due so that you are not sent to collections. If you still get sent, talk to the debt collection agency and try to buy some more time and pay the sum in the time allotted if you don’t wish to end up in court.

Go To Credit Repair Services

Go To Credit Repair Services
Source: Medium

A credit repair service helps people improve their creditworthiness after they’ve been through a difficult financial period that has caused their credit a huge amount of damage.

If you have several bills in collections, you should look for a reputed credit repair service to help you out. Do keep in mind that these services won’t be able to remove the negative credit reports you have but they will analyze all of them and ensure that there is nothing wrong with your report.

Look For Collection Errors

Look For Collection Errors
Source: NerdWallet

Often, your creditor might mistakenly send you over to collections when you have been meeting all of your deadlines. If you get a notice in such a scenario, don’t waste time and get in touch with our creditor at the earliest. Provide them with proof of the payment and get the negative credit report removed from your account.

If you get a notice and you know that you have missed the payments, you should still examine it carefully for some common errors like the collection agency seeking for an amount that is greater than the sum of the amount you owe and the fines taken together.

You should also go to a credit repair agency just to ensure that the collection agency has the legal authority to ask for the debt. If proved otherwise, the negative report will have to be removed from your credit.

Know Your Rights

Know Your Rights
Source: NerdWallet

Under no circumstances is any collection agency authorized to harass you or to threaten you in any way. In 2018, consumers filed about 81,500 against debt collectors.

So, if at any point of time you feel that the agency is not dealing with you in a proper way, you must approach an attorney and consider taking legal action against them.

Also, if you are having trouble understanding why the extra charges, if any, are being asked for by the agency, you should approach a credit repair agency to seek help in figuring out if the collectors are working in accordance with legal principles.

Wrapping up!

Poor financial planning is often the reason why you might end up being sent to collections. Make sure that you keep a proper track of all your expenses and allocate sufficient amounts to pay at least the minimum amount due for various bills each month.

Read Also: How Can Physician Medical Billing Be An Asset In Improving Collections?

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