Most of us fell behind on some of our bills and it can get late to a certain period of time. This is the time when the creditors start calling you repeatedly asking to pay the debts. Most of the creditors will threaten you on the phone. They will want to scare you or back you into a corner and make you think in an irrational manner.
Most of the creditors and collection agencies will try to be ruthless at some point. This mostly happens if the creditors are collecting on unsecured debts. Creditors collecting for mortgage or auto loan are more reputable in their collection attempts. They know they have the title of you car or your house and if you are not making the payments, they will take away the car or the house. Here are five ways to deal with the creditors.
Always check the latest credit report. Make sure that the debt for which the creditor is collecting is legit. It mostly happens that inaccurate items get reported on your credit copy and you are being called by a creditor for a debt that is not at all yours.
Be aware of the consumer rights explained in the Fair Debt Collection Practices Act. You will have a fair idea on how a collection agency or a creditor is supposed to deal with you when they are collecting for some account. If they try to violate the laws during collections, you should record their phone calls and sue them. Do not let the creditors abuse or intimidate you on the phone. They will try all possible ways, sometimes illegal methods, to get the money from you.
If the debt is too old and you don’t have the money to pay it back, then check the statute of limitations of your state. If the debt is past the statute of limitations of your state, they cannot take any legal actions against you. You need to send a dispute letter explaining that you are aware of the laws of your state and the debt is past the SOL period. This should stop them from doing further collections. If the debt is within the SOL period, then you should try to negotiate with the creditor. The creditor will refuse your offer at first, but if you make it known to them that they are getting something rather than nothing, they will eventually budge. If the creditor has agreed for a settlement amount, make sure that you have the settlement offer in writing.
Never give the creditors access to your bank account or give them post dated checks. In most cases, the creditors try to do unauthorized debits from the customer’s bank accounts.
If the creditor is calling you to pay a legitimate debt, then you should make a plan to save enough money and make a lump sum payment towards settling the debt. You must make sure that the creditor is reporting the account accurately to the credit bureau after the account is paid off.