So many people find that dealing with a debt collector is a scary process. They are intimidated by the daily phone calls and the harsh tone in some of their debt collectors' voices.
However, there is no need to fear the debt collector, especially when you know the best course of action to take when you are contacted by one.
First step to take
Start by gathering the following information from the debt collector:
- Name of their company
- Name of the original creditor
- Date of original debt
- Total balance due on debt
With that information, you will be able to double-check to make sure that the claim of debt is legitimate. You will also be able to figure out a game plan.
If you are unsure as to whether the debt is truly yours, do not agree that it is yours over the phone, since all of their calls are generally recorded. You will also want to refrain from making any promises to pay, even if it is just an attempt to get the debt collector off of the phone, as this is considered admitting to the debt.
Paying it off
Once you have established that the debt is indeed yours, you will want to discuss payment arrangements. While the best option is to pay it off in full in one lump sum, not everyone can afford to do that.
However, you will want to pay it off as soon as possible in an attempt to protect your credit.
Ask the debt collector about
- Settlements
- Repayment plans
If the debt collector agrees to a settlement, you will pay an agreed-upon percentage of the debt. This will need to be paid in one lump sum by a specified date.
The benefit of this is that it comes off of your credit report sooner because you are finished with that debt. You will also no longer have to deal with their collection calls.
The negative side of this is that while it will be reported on your credit report as paid off, it will also usually state that you paid it off for an amount less than the balance owed. While that is not as good as a "paid in full" status, it is better than letting it remaining in collections.
The repayment plan is a good option for anyone on a limited monthly income who can only afford to pay a certain amount of money each month. It is important to make sure that you are sticking with your agreed payment arrangements in order to finally get the debt paid off.
Make the arrangement formal
With either of these arrangements, it is vital that you get the agreement in writing from the company before you send any money. This way, they cannot later say that they never agreed to the arrangement and try to collect more money.
With these things in mind, you should be much more confident should you ever find yourself dealing with a debt collector.