Debt collectors can make your debt situation worse. They add another level of stress in your life. Their job is to keep on reminding you that you have unpaid debts. These people will keep on calling you to pressure you to pay what you owe.
The Consumer Finance Protection Bureau (CFPB) reveals that debt collection abuses are one of the top complaints submitted by consumers. While your debt is your responsibility and the collection is only fair, the practices are sometimes questionable. Most of the time, people report that they feel harassed, threatened, and abused in some way. When you try to understand how these collectors are compensated, you will understand why they are very aggressive in their collection practices.
Most of the time, these debt collectors receive a percentage of the amount that they can collect. That means the more they can collect, the more they earn.
Of course, this means they are more likely to succumb to abusive practices just to force you to pay. Sometimes, they might even lie to you.
This is why most people are advised to keep their debts from becoming delinquent. It is only when debts are past their due dates that a debt collection agency is called in to help make you pay your dues. So if you want to keep debt collectors from harassing you, make sure you will not miss out on a payment.
2 ways debt consolidation can keep debt collectors away
According to reports, 4.6% of outstanding debt is delinquent. Considering how much Americans owe, this means $623 billion is delinquent – with $417 being more than 90 days late. These debts are probably already with debt collection agencies.
Obviously, if you want to keep this from happening, you need to use a debt relief program that will make it easier to meet your payments. One of the best options that you have is debt consolidation.
There are two ways that this debt relief strategy can help you.
Make your debt payments affordable
First of all, debt consolidation involves a restructuring of your debts. It usually involves a new credit account that will give you a better repayment plan than what you currently have. This can either be in the form of a debt consolidation loan or a balance transfer card. Among the changes that you will look for could either be a single and lower monthly payment, fewer fees and charges, lower interest rates, etc.
The goal is to find a new credit account that will make it easier for you to meet your monthly payments. When this happens, you will not be in danger of missing out on a due date. With your multiple debts combined, it is easier to monitor your payments. And if your budget can only afford so much in terms of your monthly debt payment, that is okay. Look for a credit account or loan that will allow you to distribute your balance over a longer repayment period. This will lower your monthly payment requirement.
Once you have restructured your debts based on your current payment capabilities, it would be easier for you to avoid having your debts go to default. There would be no need to worry about debt collectors.
Option to use a debt professional
When it is not using a new credit account, debt consolidation makes use of a debt expert to help with your credit issues. If you cannot do your own debt consolidation because you are too busy to focus on it, get the help of a professional.
Even if you do not have the money to pay for their services, there are non-profit debt experts that provide their service for free. But if you really want more detailed help, then paid services will really go the extra mile to help you. Just make sure that you know to find the legitimate ones. It is true that there are scammers out there but there are also trustworthy companies who are sincere in helping people get out of debt. Just look at customer feedback, scrutinize their websites, and check out the organizations they are affiliated with or members of.
When you talk to these debt professionals, they should not make promises of conquering the impossible. And they should never ask upfront fees.
With the help of the right debt professional, it should be easier for you to achieve debt freedom. They can talk to the debt collectors on your behalf. They can work on negotiating your debts so you can save money. These people will also help you meet your debt payments. That way, you will not have to worry about missing out on your debt obligations.
Tips when dealing with debt collectors
As much as possible, you need to keep debt collectors out of your credit situation. The moment they appear to start collecting your dues, that means you have messed up somehow.
But if it is already too late to reverse your mistakes, do not fear. There are ways to handle these collectors in such a way that will benefit you. Here are some tips that you can use.
Know your rights
First of all, you need to know your rights. There are laws and important truths that you need to know about your debt situation. It is very easy to find the information that you need when it comes to dealing with debt collectors. When you know your rights, you will know if you are being abused or not. You will also know how to talk to these debt collectors. Your knowledge will protect you because you will know when they are bluffing or not. Not only that, it will place you on a more equal footing with the collector as you negotiate on what to do with your debts.
Another thing that you should do is to always verify everything. First, verify if the debt is yours. The debt collector should be able to send you proof that it is your debt. Do not entertain them if they cannot provide proof. It is also important to verify the identity of the debt collector and that they are authorized to collect the debt. Anything that you discuss should be official and thus always verified.
Put everything in writing
Finally, you have to make sure that everything is put into writing. Do not act on any agreement unless you have a signed agreement. Sometimes, they will agree to your requests – only to back out or feign ignorance once you have sent a payment. Do not let this happen. Always ask for a written and signed document so everything is clear. This will also ensure that there is no miscommunication or misunderstanding in the agreement.