How to Deal with Collection Agencies and Attorneys

You have received a letter in the mail saying that a bill on which you owe has been sent to collections. Whether this is the first letter you have received or the collection agency has been calling you to collect, the most important thing is that you take care of your debt in collects immediately before you incur more interest, acquire more fees, and blemish your credit record. Here are the steps you should take immediately.

Evaluate the Bill in Question

The first thing you should do is gather all bills, letters, and information you have about the debt that was sent to collections. Evaluate whether you in fact do owe this bill. If you do not know what the bill is for or you do not think you truly owe the bill, you should begin by requesting information from the agency. You have a right to request a copy of the original bill. If the bill does not belong to you, you will have to be ready to dispute the charges.

Be Ready

Once you have evaluated the situation and you agree that you in fact do owe the amount in question, sit down and evaluate your monthly expenses in order to come up with a game plan for paying off the bill. When you do make the call to the collections agency, you will want to know how much you will comfortably be able to afford to pay per month when negotiating a payment schedule.

Make the Call

Once you have looked over everything and come up with a pretty solid plan of action, it is then time to make the call. Make sure from the beginning that you take very detailed notes, including the names of each person you talk to, the time and date, and details of what was said. This information could be very important in the future if a problem arises down the line.

Make Arrangements

Now that you have them on the phone, be ready to make arrangements. Keep in mind that outstanding debt is subject to gather interest so be ready to pay off the account as soon as possible so that you will not have to pay more interest than is necessary. If you have a large balance, you can try to negotiate a settlement for less than you owe. Most collections will not go any lower than 80% of the total payment if they will negotiate at all. Remember, they do not have to negotiate anything and can simply garnish your wages instead, but it cannot hurt to attempt to work out some kind of agreement or payment schedule.

Stick to Your Arrangement

If you are able to negotiate an arrangement, make sure you stick to it. If you make your payments on time as agreed, they cannot change the arrangement down the line. However, if you do not pay on time, they have the right to take action to collect on the full amount at their discretion.

Avoid Paying by Check

Once you start making payments, you should avoid paying by check. Either pay by cash in person, or send money orders. Not only can a money order be used as proof of payment, but the collections agency can use the information on your check to attack your checking account for the balance.

Keep All Records

Throughout the process, make sure you keep all your records. And most importantly, once you have the entire balance paid in full, make sure you request a letter from the collections agency that the balance was paid in full for your records.