Once you fail to pay your loan, credit card or utility bills for a long time, a debt collector may be called upon to deal with you. This is especially when you don’t contact or respond to your creditors. Being contacted by a debt collector is an embarrassing prospect for many people that should best be avoided. In such a situation, settle your debt as quickly as possible, since it will only get worse when ignored. However, you need to know how to handle debt collectors effectively to pay off your debt and avoid getting exploited. Here are some tips to do just that.
Know your rights.
Some debt collectors may resort to underhanded methods to get you to clear your debt. It’s therefore prudent to know just what the debt collector can get away with. Under the Law, you are accorded specific rights in the debt collection process, and the debt collector is required to follow certain protocols. For instance, debt collectors should give you at least 30 days of breathing space (no calling or letters) or engage in harassment. Creditors shouldn’t even call you at unreasonable times such as when you’re at work without permission. Knowing these rights will enable you to know when your rights are being abused and take appropriate legal actions.
Record all correspondence.
Don’t delete any voicemails received from the debt collector and keep notes on the phone conversations received. Be sure to note the date and time of the call, the collection agency and the amount stated. The same also goes for any written letters or emails sent to you by the debt collector. Additionally, ensure you request for written confirmation of any agreement made over the phone to act as proof. Maintaining meticulous records will allow you to keep track of the progress yo vu make in your debt repayment, and any foul play on the part of the debt collector can easily be ascertained.
Consider your credit report.
It’s a sad fact that any debt collection will not go away once you clear the debt. The collection will stay on your credit report for years and greatly impact your credit score. To mitigate this effect, ensure the debt in the credit report reads ‘paid in full’ after you pay so loaners may look at it more favourably. You can also have the collection item removed by contacting the collection agency and asking for a ‘pay for delete’ deal. This is where you incur a certain amount of money to have the record of the debt totally cleared from your account.
Say little and stand firm
Once the debt collector calls, try and keep the conversation as short as possible. Such a call is just like an interview. They’re trying to interrogate you and determine a lot of things from it i.e. if you’ve got the capacity to pay. The phone conversation could also be recorded for evidence purposes so try and keep the conversation as short as you can.