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I’m In Collections, Now What?

To most of us, “collections/debt collector” sends a wave of emotions throughout the body. If you have ever fallen behind on bills, then you understand the feeling of receiving a collection call or letter. Getting such a call or notice can be a stressful and confusing situation in life which can lead to panic or fear. What most people don’t know is that there is no need to panic because you can take care of the issue at hand with just a little bit of leg work. Now you might be asking yourself how or why did you exactly end up in collections?

Usually, a collection agency will contact you after the original creditor (or company) has exhausted all efforts in trying to recover the funds on the delinquent account. It may vary, but this usually happens months after a bill has been acquired and not paid on. They will more than likely attempt to contact you via phone, mail, email, or text. After the first contact with the collection agency, you should request that the information be put in writing and sent to you if there are any questions or concerns whatsoever. While that is headed towards you, here are a few tips that will help you along the way.

1. Don’t Ignore It

You never want to ignore your account once it has been sent to collections, that will only cause more headaches in the future. The main priority you should have is to attack it right away and get ahead of bill while you can. The FDCPA (Fair Debt Collections Practices Act) protects consumers from abusive collectors and limits the number of times they can be contacted. However, this does not mean you can ignore them in the hopes that the debt will go away. Ignoring the bill may lead to many negative consequences such as a higher interest amount, impacted credit score and much more. If you are able to manage the debt as soon as possible, you will be able to avoid any future road bumps.

2. Ask For Information/Contact the Original Creditor

Understanding why you were charged for a service or product is extremely important in this process. If you cannot track down what the debt was for or if you are confused about the charges showing, always feel free to ask for a breakdown from a debt recovery expert or contact the original creditor before paying. Requesting a breakdown from a debt recovery agency will provide you with much more information (depending on the bill) involving the debt in detail. You can also do this with the original creditor however, they will usually send you back to the collection agency once they explain why the bill is owed. Accidents do happen with insurance, billing and more, which is why having an understanding of the debt is very important.

3. Consider Getting Help

Being tracked down by a debt collector is no fun so when sticky situations arise like a dispute or bankruptcy, do not hesitate to ask your debt recovery specialist, attorney or legal representative for help. Our debt recovery agency offers free experienced financial advisors to guide and assist anyone throughout this process. If communications with your attorney happen, the agency will only contact your representative directly to handle the situation moving forward. If the debt is invalid, make sure to mail in a dispute letter as soon as you can. The Federal Consumer Financial Protection Bureau provides you with a sample dispute letter on their website. Asking for help can be a daunting task but can also have a great outcome involving your situation and your stress moving forward.

4. Look For Payment Plan/Settlement Offers

Paying a bill in full sometimes is not manageable or realistic. If you are in a situation where this is true to you, never be afraid to set up a payment plan so you can avoid paying a large amount all at once. This will help you chip away at the balance making it a much more manageable amount. Debt collection agencies usually come with fees that aren’t avoidable, but some are. Usually waiving any fees or amounts is up to the original creditor which also means they have the power to say no. However, sometimes agencies will consider settlement offers if the debt can be paid all at once so it never hurts to ask.

What happens if you don’t pay?

Unless you have a valid reason or an error has occurred, this is never the route you would want to take. Being in collections in a stressful situation but having the chance for legal action to be taken is even more so. If you chose to ignore a valid debt several things could happen such as added interest/fees, garnishments, credit issues and more. Staying out of legal issues is the best advice that a debtor could heed. Once you pay your bill in full, not only will the debt recovery agency stop contacting you (unless they receive another account in your name), but you will also have one less thing to worry about in your life. So if contacted by a collection agency, always remember to act quickly, educate yourself, use the resources available and stay ahead of the curve.

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