Help! How Do I Deal With A Collection Agency

Things got a little tough due to an unexpected expense or loss of your job and now that you are just getting your act back together suddenly you are receiving calls from a collection agency. Are you wondering how the heck things took such a horrible turn and how to deal with a collection agency?

A collection agency is an agency that is used by creditors when you owe a debt and do not make the required payment. Some collection agencies actually buy bad debt at a substantial discount and then attempt to collect the original debt amount thus making money. Collection agencies attempt to contact the individual attached to the bad debt either by letter or phone.

The letters are generally a standard form letter generated by a computer. The first letter appears as a friendly reminder and lets you know your rights to dispute the debt. If you choose to ignore the initial letters, the letters begin to take on more threatening tones to the letters.

If you intend to pay the debt contact them and making payment arrangements. They will continue to contact you but the letters will be friendlier and less threatening because they want you to continue to make the payments you agreed to.

If the collection agency has your telephone number this is their favorite method of contact since they can continuously pressure you into agreeing to their terms. Individuals are often pressured into terms they know they will not be able to meet exacerbating the situation.

They can be relentless at what they do. If a collection agent reaches someone other than you on the phone it is against the law for them to disclose why they are calling and these rules also apply if they are leaving a message. So messages will be elusive. By law collection agencies must provide you with a toll free number for contact.

But what can they actually do to you? Can they have you hauled off to jail? Can they get you fired? Seize your bank accounts? None of the above! Although they often intimidate you into acting out of fear the reality is all they can do is send more form letters and make more phone calls. They can also report you to the credit bureau which of course will affect your ability to borrow in the future.

The can recommend a lawsuit be launched or if they have purchased the debt they can sue you. However the occurrence of this is actually much less then they would like you to believe.

So lets clear up what they cannot do. The collection agency cannot legally seize your assets, bank accounts or paychecks unless they have already had a successful lawsuit with a judgment awarded to them.

Collection agencies cannot disclose information about your debt to anyone other than a credit bureau, nor can they post any type of public announcement about your debt. Even if they threaten to do so they cannot by law. They also cannot get you fired nor can they make any physical threat to you.

It’s important that you know your rights! You didn’t purposely set out not to pay your debt. Things happen in life that change you circumstances and sometimes you are not able to meet your financial obligations. The collection agency will try to make you feel like the biggest deadbeat on the planet. Don’t let them intimidate you or coerce you into a commitment you cannot keep!

They try to make their role appear much more powerful than it is. They will attempt to make you believe that they have the power to garnish your wages, talk to your employer, ruin your life. They do not! Not without a judgment from the courts!

Collectors want you to believe that you are being sued but generally lawsuits if you have plenty of assets and a good income making their odds favorable. If this process is undertaken you will be served with documents that specify a court hearing date, and where to appear in court.

Always remember there are actually only three things a collection agency can do to you. Continuously bug you with letters or phone calls, supply your information to the credit bureau which will affect your ability to borrow in the future, and there is a remote possibility that a lawsuit may be filed. This seldom happens!

Collection accounts have a 7 year life expectancy. If they have been unable to collect the debt within the 7 years they must remove the debt from all records including credit agencies; however there are no limits on how long they can continue to mail and phone you. The start date for the 7 years is the original date the debt was incurred. If at some point you manage to pay the debt they must notify the credit bureau who will mark the outstanding debt as paid. It will not be removed from the credit bureau.

You also have rights in regards to their continuous contact. If you no longer wish to communicate with the agencies you must write them a letter stating you wish the debt collector to cease further communication with you. The collection agency can then only contact you relating specific changes in the state of the debt.

If you find yourself in a financial mess the last thing you need is to be harassed by a collection agency. If you are in a situation where you are able to make payment arrangements by all means do. If however you are not do able to pay do not let them intimidate you into making unrealistic commitments you will be unable to keep. Know your rights when it comes to a collection agency.

Aura Mirchandani is the Editor and Publisher of Article Click. For more FREE articles for your ezine and websites visit ArticleClick.com. Article Click is a free content article directory.