Sometimes life throws you a few surprises, from health issues to a much-needed repair in the home. Unexpected bills can make finances tight, often pushing financial demands beyond what is available. If debts spiral, unpaid bills can force finance companies to employ the services of debt collection agencies.
This is a stressful experience for most, as these agencies are trained in manipulation and getting the debts repaid via any method they legally can. Even when doing everything legally, it can still reach such a serious point that agents may come to your home in order to recover as much value as they can to repay the debt.
When this happens, your prized possessions and even family heirlooms can be at risk. However, fortunately, there is normally a way to resolve these issues before things get extreme and these steps can often be taken without belongings being lost.
Top Ways to Deal with Debt Collectors
When you are first contacted by a debt collection agency, the initial feeling is often panic. So, here we’ll look at some steps to help fix the issue, or to at least make it more bearable.
1. Get Serious
It is time to face up to the situation. Make sure you keep records of every agency contact (date, time, name etc.), ask the company for a validation letter of the exact debt, stay calm, and educate yourself on debt collection rights and make sure that you fully understand the jargon, especially if your debt is credit card based and letters are full of credit card acronyms.
2. Review Your Finances
Seriously consider if all the bills you are paying are actually needed. Sure, online TV, music streaming apps, and dinners out are fun … but, are they necessary? Just cutting out what isn’t absolutely vital for a while can sometimes allow you to have enough available funds to renegotiate with the debt collection agency.
3. What has Value?
If you can’t negotiate with the agency based on your current finances, and you have been given a choice to pay up or to lose some belongings, then why not consider what value you can get out of your existing belongings without actually having them taken. This way, via systems such as secured loans, you can use things like your car, gold, or other assets as security to get the money you need to repay overdue debts. This allows for more time to get back on your feet and work towards clearing the rest of your debts.
4. Dispute the Debt
Debt collection agencies may seem ‘all powerful’ when you are drowning in debt, but in fact, they are obliged to follow strict processes and laws. Simply writing to them to dispute the debt within the first 30 days can often force the agency to prove their case (without them continuing to chase you while they do so) and this buys you some more time to prepare to fight or pay.
At the end of the day, most people do not choose to be heavily in debt. It is often simply the result of unexpected expenses or bad planning. Interest rates are often overlooked, and suddenly a manageable debt size has spiraled into a much larger debt without the person really noticing.
Because of this, the government has strict laws about how debts may be collected. People need to be treated with the respect that they deserve, given notice and the opportunity to repay, and given time to negotiate repayment. It is only after all of this that these debt agencies are permitted to send out debt collectors. So, if you can, refinance or negotiate before the interest mounts up and you receive that dreaded knock on the door from your friendly debt collector.