How Do I Handle Debt Collectors?

First of all, the best way to protect yourself from being harassed or mistreated by debt collectors is to know and understand your rights as well as the statute of limitations. Just because you are over indebted does not mean, the collectors can push you around. To handle such collectors properly and effectively, you should be well aware of what they can and cannot do.

For one, collectors are only allowed to call at certain times of the day. Moreover, the collector should respect your privacy. They are not allowed to call you at work especially if your employer does not allow it. And they cannot inform anyone else about your debt situation.

In case, you receive continuous calls beyond the limits as set by law, you can file a complaint against them. This does not mean however that you are excused from dealing with the debt. It merely serves as a way for you to keep the debt collectors at bay.

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You can also actually make a written request for them to stop calling you. Once the letter is sent, you should, the calls should stop. Furthermore, if a collector contacts you over the phone, he should not make false statements to simply force you to settle the debt. In addition, they should talk to you in a respectful manner and not in a way as if you have committed a crime. It is prohibited for them to use abusive words or make any threats of violence.

Second, after receiving a call from a collector, it is essential that you request for verification. Most of the time, the creditors will contact an agency to handle debt collection in their behalf. However, it is in your best interest to check if the agency indeed has the right to collect payment for your debt.

Third, you have to learn to negotiate. After settling the issue on whether the debt is accurate and the collection agency is rightfully assigned for collection, you should make an attempt to negotiate with the collectors. Start by offering a payment less than what you can actually afford, this shall give you room for adjustment in case the collector tries to deny your offer.

Keep in mind that timing is everything. If you are feeling like the collector is acting firm, unfazed by your attempts for negotiation, then perhaps you can try to make a deal at the time they are more likely to bite into your offer which is usually by the end of the month. After making a deal, make sure that you have everything properly documented. Secure the agreement in writing. Such is important even before you send any form of payment.

Do not act defensively when you receive a call from a collector. Remember, they are only doing their job. If everything goes well, then you can come up with a favorable arrangement. Otherwise, you may consider filing a complaint against the debt collectors that keep harassing you and acting beyond boundaries as set by law.

What to Expect from Debt Consolidation

Debt has fallen on you like an avalanche. You don’t know where to start digging, and all you can think about is how much more debt you  have  in your way. You never thought you’d be in this mess, but here you are – buried. The good news is that there is a way out of the pile of bills with debt consolidation.
Debt consolidation has become a popular option for those looking to eliminate their debt problems as quickly and effortlessly as possible. With the number of companies sitting there to overlook your debts and offer counseling on paying them off, debt consolidation can be a tad tricky to understand at times. So while you’re looking at the stack of bills piling on your desk, are you wondering about how debt consolidation actually works?
Knowing what to expect when you choose debt consolidation will help you finally put an end to your financial madness.

What to Expect from Debt Consolidation

Making an Appointment

The first thing you should do is research the different debt consolidation companies available. One of the easiest ways to check the credibility of a company is by keeping your eyes out for their BBB or Better Business Bureau reviews. If the company has secured an A+ rating on BBB, then you can trust the company with your eyes closed.
Just like any other business, each debt consolidation company has its own fees for the work they will do to help you. While you may not want to go with the most inexpensive company,  getting a good rate is important in starting your road to financial freedom.

  • Start with finding a company of a good and strong reputation. Seek recommendations, read reviews, and research. For example, the National Foundation for Credit Counseling (NFCC) offers certification for counselors and sets certain requirement for member organization. Thus, seeking references from the NFCC will be a good way to start.

Once you find a suitable company, call them to  schedule an appointment. Be sure to ask  about the type of documents you’ll need to bring.

The First Appointment

Duringthe first appointment, your debt consolidation counselor will look at your income, expenses, and debt. He or she will then calculate all of your debts, and then determine the affordability of the amount that you will have to pay per month.t.
 To determine that exact figure, your counselor can look into finding a debt consolidation loan, and start calling creditors to discuss settlements.

Before Your Second Appointment

Between your first and second appointment, your counselor will be hard at work calling your creditors to negotiate a settlement. Many lenders will decrease the amount of money you owe them if you close your account and agree to pay the lower amount. This is where having a good counselor will benefit you. One that is experienced in negotiations and well known in the circuit of creditors will have a better chance  of getting your debt decreased significantly. Some people can see a decrease in debt up to 20%.
While you are at the stage where you are about to schedule a second appointment, to help you live a life that is completely debt-free, a certified credit counselor will calculate your total debts. All secured and unsecured loans are taken into account, which can help create an all-inclusive budget for you.
Once the final amount is settled or all debts, your counselor will go to work on finding you a loan that has the lowest interest rate. With a low-interest rate,  there are higher chances of you being able to afford the monthly payment.

Your Second Appointment and Beyond

At your second appointment, you’ll find out how much debt you’re responsible for, and the loan that your counselor has found for you. If you agree, you’ll fill out the necessary paperwork.
The next step is to determine how you will make the monthly payments on your debt consolidation loan. Your counselor will help you come up with a budget. You’ll use this budget to the best of your ability, and schedule subsequent appointments w to make necessary adjustments, if any. .

Paying fees

Certified professionals will charge you a certain amount of fee. You don’t want to settle with something that’s too inexpensive for you to digest, or go for a company that plans on burning a hole in your pocket. Make a comparison especially when it comes to getting a bang for your buck. You will find non-profit organizations as well, but you will still be expected to pay a minimal fee and some nominal charges to get your consolidation work started.

Final words

Once you manage to grab a hold  on your budget and payments, you will be free to deal with your personal fianances on your own. If you ever need assistance, your debt consolidation counselor is only a phone call away.