Managing your finances is never easy. There are monthly bills to be paid, supplies to be bought, and living expenses to be managed. There are times when you find yourself behind your monthly payments and before you know it you are drowning in debt that seems almost impossible to pay off.
Before you use all of your money to pay off a debt or are forced to sell your property to find an even balance, it's best to negotiate a deal with debt collection agencies. That way, you have more options to repay your debts. When you close a deal, you are also more likely to have better payment options. Here are five tips to help you navigate your way around debt collection agencies.
1. Check the amount and source of the debt
There are many reasons people get into debt. It can come from credit card spending, loans, bills, excessive shopping, and many others.
For example, medical bills can be costly, especially for those who receive major surgeries and treatments, or who have been locked up in hospital for a long time. Not everyone has the financial ability to pay off large sums of medical bills, especially in emergencies. This can be one reason some people run into debt after receiving medical treatment.
Hospitals can turn to debt collection agencies to collect medical bills from unpaid patients. Other companies such as banks or credit companies can also use a debt collection agency to reach overdue customers.
If a collection agency contacts you with an outstanding balance, double-check all the details. First of all, make sure it's your name and the amount to be paid matches your debt. Second, make sure that all the details of the debt are explained to you. If there is a discrepancy with the amount or the source of the debt, clarify with the debt collection company before paying any amount.
2. Speak calmly
Some debt collectors may try to catch you at an unexpected time to scare you. They can put pressure on you and force you to pay what you owe. When you get a collection call, speak calmly and ask about all the details about your debt. It is important to know your rights as a debtor and the limits of being a collector. Avoid raising your voice or sounding excited when a collection agency contacts you. Remember, debt collection agencies can't bother you just to get you to settle, and they can't involve your employer or family members.
If you communicate calmly, you are more likely to negotiate terms in your favor and avoid unnecessary conflict with the collector.
3. Be vigilant
If you get a phone call asking you to pay off your debt, don't give out your personal information to begin with. Be wary of scam collectors who may scam you into paying a large amount of money.
Do not provide any information about your bank accounts, real estate, employment, or assets. It is best to make a personal appointment with a representative of the debt collection company or request a printed statement listing the amount to be paid. A legitimate debt collection company should be able to provide you with a copy days after your request.
4. Negotiate a payment plan
Just like with loans, you can arrange payment options to settle your debts. Negotiating a payment plan with your debt collection agency allows for more flexible payment terms. That way, you can also stop them from constantly bothering you by tracking a payment. You can offer to pay a large amount in advance and then make monthly payments, or request a longer payment period and pay out in small amounts.
The goal of a payment plan is to get you around your budget and not paying more than you can afford.
5. Request a signed contract
After completing the terms of payment, request a signed contract that lists all the terms agreed with your debt collection agency. By entering into a written agreement, both parties will keep the deal going and avoid future mishaps such as claims for unpaid credits or overpayment of your fees.
Read all terms and conditions again before signing the agreement and notify the debt collection company if any details need to be changed or added. Do not start your payment until both parties have signed the contract. Make sure to also request a copy that you can keep.
Make sure you meet the end of business and follow all the conditions given to avoid future legal issues.
Negotiating with debt collection agencies doesn't mean not paying for what you owe. Not everyone can pay off their debts at once, especially if a debt arises due to unexpected circumstances or emergencies.
However, you can always find solutions that will help you pay off your debts without having to sacrifice everything you own. If you negotiate well with your debt collection agency, you will likely find a payment deadline within your means.
5 Tips for Negotiating a Debt Collector Deal was first published in Home Business Magazine.