How to Deal with a Debt Collections Agency

How to Deal with a Debt Collections Agency

Debt collections agencies aim to collect the debt. There are many ways you can work with them to resolve your personal credit issues.

Get Everything In Writing

It is important to get literally everything in writing. Ask the debt collector to send you communications via mail or by email. They are legally obligated to send you a letter letting you know of the details of the debt and any other related issues.

Avoid Giving Out Your Personal Details Over the Phone

Many agencies will contact you by phone. They might call you repeatedly at work and during the evening when you’re at home. Be polite but be firm. Avoid saying very much to the person on the other end of the line. Let them talk while you listen. It’s best to avoid saying anything about your personal life, such as where you work as well as information about your birthday and other personal details.

Consider a Settlement

In some cases, it might make sense to settle with the debt collector. They might be willing to settle for only a few pennies on the dollar. That can free you from this issue and help ensure your credit score does not suffer a huge hit in the long run. As the experts at Lantern by SoFi point out, this can help you get a better deal as “applicants could qualify for a lower interest rate through refinancing.” You can free yourself of the previous debt, do things such as a refi car loan and move on with your life.

Know Your Rights

Know about your rights when you are working with a debt collection agency. You should know that such collection agencies are governed by highly specific laws. They can only call you during certain hours. They are not allowed to make any kind of threat against you. They cannot state they will find out where you live and bother you in your neighborhood. Any further actions such as garnishing your wages to pay the debt can only be taken if they go to court and have legal backing.

Be Wary of Scams

While many debt collectors are allowed to operate, there are certain places that might choose to engage in scams. An agency may pose as a real agency when it is not. They might confuse you with someone else who has that debt. You have the right to get a callback number when they contact you. You should find out about the agency, including where they’re located and who they are attempting to collect money from when they contact. Scams are everywhere in this industry. Don’t mistake a criminal for a debt collection agency. Avoid being conned into paying money you don’t owe.

These agencies can actually help you clear up your credit and reduce your debt as long as you deal with them wisely.

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