Help! A Debt Collector is After Me!
We’ve all been there. We’ve all made financial choices that seemed manageable at the time, only to come to regret it later. In some cases, one financial decision can be like removing a keystone from a burgeoning landslide. One seemingly simple mistake can snowball into financial disaster faster than we ever thought possible. Having a bill collector after you is never a pleasant experience, but there are a few important things you need to remember. Just because you’ve defaulted on a credit card or a bill, it doesn’t mean you’re a failure. It means that you’re human. Everyone makes mistakes and the important thing is if you learn from them and avoid making them in the future. Here are a few common sense steps you can take when the phone starts ringing and the not so nice letters start arriving in the mail.
The first step is to get organized. While it may be human nature to stuff those notices somewhere where they are out of sight out of mind, that won’t solve your current financial troubles. Take a pad of paper and a pen and write out all of your expenses every month. Make educated guesses on things like your food budget and entertainment. Map out all of your credit cards, including the ones in default so you can get an accurate picture of how much money you have coming in and how much you have going out.
Maybe the biggest reason why you shouldn’t avoid talking to a debt collector is that they tend to be much more flexible and willing to work out a deal if you talk to them early. The longer you wait and the longer you avoid them, the less flexible they tend to be.
Another important reason why you want to tackle any account that has been sent to collections right away is the health of your credit score. In many cases, if you are up front and honest with your creditor about your current financial situation, they will refrain from reporting it to your credit bureau. This isn’t always the case, of course, but when it comes to dealing with a debt collector, honesty really is the best policy.
If the main reason why you have been missing payments is due to a financial hardship like you just lost your job or you are going through a costly divorce or a medical procedure, most creditors are willing to cut you a deal. If you agree to start making payments on some of your debt, they will forgive the rest. And the best part is, it will, in most cases, stay off of your credit report, leaving your score pristine. But again, you must act fast. You cannot ignore phone calls and letters because the longer you wait, the less flexible everyone on the other end will become.
Finally, the most important tip is to simply not stress the situation too much. While it is never a good thing to default on an account, it happens thousands of times per day, every day in the United States. You are not unique and you are not a monster. There is an entire industry that exists solely for dealing with late account payments. If you are upfront, honest and willing to make amends whichever way possible, you can whip debt collectors for good.