Being in debt is stressful as it is, and with collection calls pouring in, you are right about to lose your mind! They are persistent, non-forgiving, rude and painful reminders of the debt you have lurking in the shadows. If you have collection calls pouring in, this means that your creditors have sold your debt to a collections agency, or the creditors have hired someone to harass you until you’ve made your payments.
Don’t lose hope just yet, as there are options that you have even when collection calls are coming through every day. Here are a few steps you can take to handle the collection calls and from there, handle your debt.
What exactly do you owe? It’s important to have a clear understanding of what exactly you owe, what your credit rating is, and what your interest rates are for each loan or debt. If you are aware of what you owe, you can tell collection agencies that you are aware of what you have to pay and will be paying off the debt as soon as you can. You can also notify them if they have made any mistakes or errors in mentioning what debts you have.
There are companies and legal firms that can help individuals deal with collection agencies and debt. If you find that you’re overwhelmed by the amount you have to pay back, or the demands of the collection agencies are impossible for you, then talking to a free debt managing company or getting free legal advice can help you manage your financial affairs. The collectors that are calling you will also sometimes offer debt management plans that you can agree to, where they extend the time you have to pay off your debt and reduce the monthly payments you have to make.
A collector may also offer you a settlement. A debt settlement is when you and the collector agree to a reduced amount of the debt that must be paid off in full, and once that is paid off, your debt will be closed. You can negotiate your settlement as well, and choose an amount that is mutually beneficial to you and the collector. Collectors often are attracted by this option because instead of hounding you for money for months that you may or may not pay, they get a lump sum amount immediately.
Whatever you and your collector agree to, make sure you get it in writing. It is important that you clearly ask all your questions and concerns and make sure the contractor has understood exactly what you are willing to do and you have understood exactly what the contractor has offered.
This may seem pretty much common sense, especially if you are already in debt. But some people are in debt denial and think that they are actually not spending that much money. For example, if you’re in debt denial, you may hear yourself saying things like “I don’t have enough money to pay off my student loans, but look at this iPhone that I only have to pay 20$ a month for on my credit card”. You think you’re saving money when actually you’re spending money you don’t have. It’s time to get serious about your debt, and with collection calls coming in every day, the urgency to pay off your debt is clear.
High interest rates are what have probably brought you to this stage in the first place. Instead of even touching the original debt, you’ve been paying off the high-interest rates and the penalties instead. If you’ve arranged a payment plan with your creditors, try to get your debt with the highest interest rate settled first. It’s tempting to pay off the debt with the highest balance, but depending on what you’re paying in interest and in fees, you might actually be paying more for the lower debts.
An intriguing option that you can use is debt consolidation. This option allows you to consolidate all your debts into one larger debt. You basically pay off all your smaller debts with one large debt and that also usually has a lower interest rate, making it easier for you to manage your finances and pay off your debt more efficiently. Collectors and creditors will prefer this option to you declaring bankruptcy, as they most often get paid a lot more from your interest rate as well. In the end, it’s a mutually beneficial agreement for both parties.
Ignoring a debt collector is not beneficial to you. It will only make your debt increase and reduce your credit score even further. There is even a possibility that the collector finds grounds to sue you. And if not, eventually the collector will sell the loan off to another agency that will start the collection calls all over again. You can’t hide from your debt, so it is better to tackle it head on as soon as possible.
There is always an option for you to choose when you are dealing with debt and collection agencies. If you feel as though there is no option left for you, it’s time for you to talk to a debt managing company and counsellors who will help you make important life changes that can help you reduce your debt and take your first steps towards the journey of bill repayment. Once you’ve paid off all your debts, you will feel free and independent, giving you a much more positive and refreshing outlook on life. You will appreciate your money and your finances and will learn how to manage your budgets and financial affairs much more efficiently. Going through the nerve-racking journey of debt repayment and collection calls can be terrifying, but coming out at the end of the tunnel debt free is worth every hassle.
