How Do I Deal with a Collection Agency?

| Tedis Baboumian |

If your bills have gotten out of control and are a few months behind, you can count on hearing from debt collectors. Dealing with collection agencies can be stressful and overwhelming. You may hear from them by mail, phone, email, or text, and the more persistent they are, the more you can only think about one thing, which is “How do I deal with a collection agency?”

Don’t Pay the First Time You Hear from Them

Collection agencies only get paid if they’re successful at collecting money from you, so they’re likely to use high-pressure tactics. Don’t give in to the pressure to make a full or partial payment right away. If you even pay a few dollars, you’re acknowledging that the debt is legitimate. An old debt may be past the statute of limitations, but once you make a payment, the clock is reset.

Get Clarity on the Debt

The lender you initially borrowed money from may sell your debt to a collection agency, and if they’re unsuccessful at collecting what you owe, they may sell the same debt to a different agency. It’s important to make sure the amount they say you owe is accurate.

As soon as you receive a letter from a debt collection agency, send them a letter telling them you want a debt validation letter. This letter gives more information about the debt and who it was originally owed to along with information on how to dispute it if you believe it’s not accurate.

Your Rights as a Consumer

You have the right to let debt collectors know how and when it’s acceptable to contact you. If you dispute the debt, the collection agency can’t ask for payment for 30 days while the dispute is investigated. Debt collectors don’t have the right to try to intimidate you or threaten you. They can’t use profane language or say that you’ll be thrown in jail.

They do have the right to take you to court if the debt is legitimate and you refuse to pay. If you don’t respond to legal action, the judge is probably going to decide against you. If that happens, your wages may be garnished, which means payments are automatically taken out of your paycheck. Your bank accounts can also be frozen.

Being Responsible About Your Finances

If you’re unable to pay, you might want to avoid any contact with debt collectors, but it’s important to face the problem if the debt is legitimate. The good news is that debt collectors are often willing to negotiate. They may accept a lower lump sum amount than the full balance, or a payment plan.

If there are errors on your credit report, Dovly’s AI credit engine engine can get to work disputing them for you. There may be accounts reporting as past due even though they were paid on time. If this is the case, those need to be disputed before you end up dealing with collections agencies.

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