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Collection Agencies, the Good the Bad and the Ugly

            by Sandra Wellman

Collection agencies are not as kind as creditors or lenders so therefore be warned…the collection agencies are on the loose!

We must understand how collection agencies work in order to find a way to stop hassling phone calls and letters. Collection agencies are a third-party source hired by creditors after the creditor has made every attempt to collect a debt without success. Collection agencies will search high and low and often play nasty little tricks trying to hunt you down. If you changed your address and typed your credit card into an online database, do not be surprise when the debt you tried to outrun catches up with you. Collection agencies tap into all types of resources in an effort to hunt down debtors. Collection agency personnel search through phone directories, online databases, make phone calls posing as friends to lure the debtor in, sifts through the records at the post office, and so on. Some collection agencies have even threaten debtors by phoning their home at late hours of the night, calling friends, family and neighbors, and so on. There is no stone unturned when it comes to collection agencies in a search to find a debtor.


Collection agencies cannot take a post-dated check from you and cash it until they notify you first. They cannot ask for postdated checks by frightening you with criminal suits. Collection agencies are not permitted to send post cards in an effort to ask for payment, nor can they label, or place symbols outside of an envelope to press for payments. There are many areas of legalities and illegal acts to look for if you are in debt and threatened with lawsuits, liens, repossessions, foreclosures, and judgments. Some of the most deceitful areas of illegal acts made by collection agencies include false unlawful authorization forms, or sending out a representative of the collection agency posing as an officer of the law. Some creditors even harshly threaten debtors by using profanity or harassing family members by imitating government representatives. Creditors have even tried cashing postdated checks and attempted to charge late fees for insufficient funds. It is important that you learn your rights when your credit is in jeopardy. If you are taken to court and know your rights, you might see a way out of a bad situation. If you know your rights you might even find a way to avoid court by taking another route to stall your payments. If you suspect you are heading down a bad credit path, then it is important to document all communications between collection agencies, lenders, and other sources so that you are prepared when or if you hit the courtroom.


The upside is many of the collection agencies make mistakes by hiring low waged servants to handle the job of finding debtors. When they are sifting through the files, they often lose contacts since they have millions of records each day. Now if a collection agency has an affiliation with the three big bureaus, then they have access to information that independent collection agencies do not have. If you are in a financial bind that makes it difficult to repay your debts, you may consider losing your self and leaving no traces when you leave. If you move, do not freely hand your information, including address, phone, city, or other information to anyone you do not trust. When you set up a phone account, make sure that you have your phone unlisted. Do not apply for loans, credit cards, or anything that requires information from you. It is important to keep a low profile in your new area to avoid complications. This is a temporary solution if find no other solution for getting out of debt. Problem! The problem with running away from your debts is that in time it will catch up with you no matter how cautious you are. If there is no other way out then sometimes, we have to take a leave of absence, but if there is a solution, we need to search all options available to us first.


One solution is negotiation. If you are hassled by creditors, it is time to send a letter recognizing your situation and asking for an extension on payments. If you make regular payments working the debt down then you are on the right road to credit repair. If your debt has reached the collection agency you might want to call your creditor and ask them to take back your debts. This means you will set up a plan to repay the charge against you and continue paying until that debt is paid in full. In return, your creditors will contact the collection agencies and let them know the debt is in current resolve.


Do not miss a payment when the creditors take back your debt. This will only frustrate the creditors since they were nice enough to give you a second chance. If you call your creditors and ask for a take back on your debt and the creditor denies you but, gives you the opportunity to contact the collection agency to set up payment plans…by all means do it! If you are lucky enough to hear this from a creditor and the creditor as promises takes back your debt after you paid off the collection agency, you are taking steps to rebuilding your credit.


When you are in debt, creditors will contact you first for up to four weeks in an attempt to collect. When you fail to make payments, the creditors contact the collection agencies, who then pursue the debt. To avoid collection agency hassles deal with the creditors if at all possible.




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