Debt Collection, Debt Relief

Tips for Getting Your Debt Out of Collections

Getting out of debt can seem like a never-ending battle. Once someone falls behind on one or more bill payments, the debt collector calls can be relentless. The late fees and penalties that are often assessed on past-due accounts, not to mention the interest rate spikes that come along with missing a payment, can make getting back on one’s feet nearly impossible. There are certain steps that can help consumers who are facing these types of situations get out of debt and stay out.

Remain Calm.

It can be easy to react out of stress or panic and make decisions that someone would not normally have made, especially when dealing with debt collectors. It is important that whatever decisions are made by the consumer are ones that are carefully considered and logical. Many consumers may react out of fear and enter into payment agreements that they would not normally agree with and cannot realistically afford just to get the debt collector to back down. The aggressive techniques used by many debt collectors have this motive in mind. Make sure you understand and get the terms in writing, first. Never agree immediately to a payment arrangement over the phone with a debt collector.

Do Not Ignore the Issue.

The worst thing a consumer facing collections can do is to not open the notices that come in the mail and pretend that the problem will go away. Unfortunately, it will not. By ignoring the communications, consumers could be ignoring important legal documentation, allowing the creditor to obtain a judgment in their favor and even garnish the person’s wages. Hiding from the problem will only make it worse.

Know Your Rights.

Debt collectors are persistent and often aggressive, but this does not mean that the consumer loses all rights.  The Federal Trade Commission (FTC) and the Fair Debt Collection Practices Act (FDCPA) prohibit the types of communication, threats or harassment made by creditors or third-party debt collectors, as well as the hours when they can contact consumers. If a debt collector violates one of these laws, they can be reported to the Consumer Financial Protection Bureau (CFPB), face lawsuits and fines.

Verify the Debt.

When first communicating with the debt collector, it is important to get information on what is owed and verify the debt. A consumer should check his or her credit report to see if the debt does show up on the report. The consumer also has the right to request validation of the debt, including the name of the original creditor, name of the collection agency, and amount owed.

If the information provided shows that the debt is not accurate or is not owed, it is important that the consumer dispute the debt and notify the credit bureaus that the debt should be removed from his or her credit report.

Make Payment Arrangements.

If the debt collector is contacting you regarding an accurate debt, it pays to often work with the debt collector to pay on the balance. Several different options exist but should be carefully considered, depending on the consumer’s financial situation. Some consumers look to debt consolidation or personal loans to pay off the remaining balance. If the debt involves credit card debt, another possibility is to transfer the balances to one card with a lower interest rate. Some creditors will work with the consumer on settling the debt, a tactic which is often used to pay down medical debt. When you are negotiating on a debt, make sure the arrangement is memorialized in writing and that it is entered into upon careful consideration, including considering the tax consequences with forgiving part of the debt.

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If you have questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

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