Paying off debt isn't really fun, especially when collectors become involved. Here's how to deal with the collectors in a way that is honest and non-confrontational.
Pick up the phone up
When a debt collector calls, you need to answer the phone. As much as it seems like you might want to stay away from them, you are better off answering them, according to consumer debt expert Michelle Dunn. She explained that you will have to pay off the debts eventually, unless you qualify for bankruptcy, and you will be better off just giving the debt collector the info you need.
"You will have to deal with them calling and sending you letters, and the debt may be reported to your credit report. You should never ignore a collection agency - that only intensifies the calls...and can promote court action," said Dunn.
A lot of consumers who answer the phone have actually been able to point out the debt was false and save their credit scores because creditors are sometimes known to make mistakes. You want to verify the debt really belongs to you and is accurate.
"You must ask for verification within the first 30 days of being contacted. If you wait and ignore the calls and letters and the 30 days goes by, by law you are acknowledging that you owe the money," said Dunn. "It will be much harder for you to dispute the debt after that, and you may lose in court, since the law states you have 30 days to dispute the debt or request the verification. So the best thing to do is make payments or stay on top of the situation and dispute within those first 30 days, in writing!"
Paying for your debt
Assuming the debt is verifiable, however, you should immediately discuss making a payment plan with the debt collector and make regular payments. If the collector believes you're holding out on them, they do have the legal right to take a debtor to court. Set worries about your credit rating aside and pay debts off as you can, because liens and judgments against you are more significant.
"Once accounts are placed for collection, you just have to make payments to them all until they are paid in full," Dunn noted. "The only way to get out of debt faster is to pay it off faster. Budget your money, cancel your credit cards, get rid of the cell phone, get rid of cable and internet, carpool, and bring your lunch to work - get a part time job. The only way to get yourself out of the hole you dug is hard work; you need to make more money somehow and send as much of it as you can to the creditor."
Things collector can and cannot do
Pick up the phone up
When a debt collector calls, you need to answer the phone. As much as it seems like you might want to stay away from them, you are better off answering them, according to consumer debt expert Michelle Dunn. She explained that you will have to pay off the debts eventually, unless you qualify for bankruptcy, and you will be better off just giving the debt collector the info you need.
"You will have to deal with them calling and sending you letters, and the debt may be reported to your credit report. You should never ignore a collection agency - that only intensifies the calls...and can promote court action," said Dunn.
A lot of consumers who answer the phone have actually been able to point out the debt was false and save their credit scores because creditors are sometimes known to make mistakes. You want to verify the debt really belongs to you and is accurate.
"You must ask for verification within the first 30 days of being contacted. If you wait and ignore the calls and letters and the 30 days goes by, by law you are acknowledging that you owe the money," said Dunn. "It will be much harder for you to dispute the debt after that, and you may lose in court, since the law states you have 30 days to dispute the debt or request the verification. So the best thing to do is make payments or stay on top of the situation and dispute within those first 30 days, in writing!"
Paying for your debt
Assuming the debt is verifiable, however, you should immediately discuss making a payment plan with the debt collector and make regular payments. If the collector believes you're holding out on them, they do have the legal right to take a debtor to court. Set worries about your credit rating aside and pay debts off as you can, because liens and judgments against you are more significant.
"Once accounts are placed for collection, you just have to make payments to them all until they are paid in full," Dunn noted. "The only way to get out of debt faster is to pay it off faster. Budget your money, cancel your credit cards, get rid of the cell phone, get rid of cable and internet, carpool, and bring your lunch to work - get a part time job. The only way to get yourself out of the hole you dug is hard work; you need to make more money somehow and send as much of it as you can to the creditor."
Things collector can and cannot do
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