Sooner or later most of us will face a situation that will leave us with bills that we can’t pay. Loss of job, death in the family, divorce, illness, and emergencies happen and often it leaves us financially broken. This is when the debt collectors start calling. This is a scary time and if we have never faced these problems before, we may try to hide from them. We simply do not know what to do. We are trying our best, but our options seem nonexistent.
First, let us look at what we should not do.
Do not ignore or avoid the contact.
This is not going to work. Computers and technology are so advanced that even a novice collector can find you in little to no time. They will first access the information on your credit application. This contains your address, place of employment, relatives, other companies you do business with and your banking information. Even if you have changed addresses, this is enough information to find you. It is amazing what comes up when they do a basic and free background check online, done by a private citizen. This is nothing compared to the programs the collection companies use.
Stop the bleeding. A debt collector is not out to ruin your life. Their job is to collect money for their employer. That is how they stay in business. They would rather work with you than against you. In most cases, the collector is one of your best allies. Debt settlement is your best option. Many times they can stop additional charges from adding up which absorbs the money you send them. If you explain the situation, they have programs to help. Sometimes payments are deferred and interest payments are accepted to allow more time on the principle.
What happens next?
The calls stop?
Of course, every debtor who ever checked their call waiting is hoping that the bill collector will just give up and go away. While it could happen, the chances are slim. People think because they get a small window of time when the phone is quiet that they gave up. More often than not, they are escalating their efforts. Sometimes that means they are selling your debt to another company. For whatever reason, they feel it is better to receive a portion of the money and let your account become someone else’s headache. Enjoy your break, because your procedure just began again with a new company.
This new company buys hard to collect debts, because they have the tools and resources to collect them. They will probably come at you harder and be less willing to work with you. Your credit report takes another hit from a new collector.
They reach further
In a last-ditch effort to find you before they take the matter to legal measures, they contact people associated with you. The secretary at work tells you about a person who complained that you would not return their call. Your neighbor mentions someone calling asking for your number. Your family members get calls. This adds more stress and embarrassment to your life. Even now, it is wise to return the calls. This company is going to take the next step if you do not find a resolution. It is embarrassing, but it is just a phone call.
Time is up. They have tried to reach you and they have tried to work with you. But your fear held you back. Now they will bring a lawsuit against you. You can fight the lawsuit, but if you owe the money and you have a broken contract, you will not win. If the lender wins in court, he can then garnish your wages and get his money directly from your employer. Your credit score takes a major hit with a judgement against you for lack of payment. Recovery from the situation could take years. If this happens enough times, by enough creditors, you may end up in bankruptcy.