Beat collectors by knowing your rights
Debt Collection Tips #1 – Keep Communications Open
Once you have your Money Management Plan on paper, you will be able to professionally respond to requests for payment from creditors and debt collection agencies. They may ask you, or you can offer, to send them a copy of your Money Management Plan. This opens the communication between you, and they may even be able to offer suggestions to improve your plan. Keep in mind, however, they will offer suggestions based upon their best interests, you need to negotiate based upon what’s best for you!Debt Collection Tips #2 – Know Your Credit Report
Obtaining a copy of your online credit report, and learning how to use it in debt management, can help you when it comes to negotiating with your creditors.Debt Collection Tips #3 – Negotiating With Creditors
You can request a monthly payment reduction, either a temporary extension, or permanent reduction. Keep in mind, this method can involve adding years to your payment plan, as well as some type of “deferral fee” charged by the creditor.
Ask if the interest rate, principal balance, or monthly payments can be reduced to permit you to continue to pay the debt on time. Ask for principal reduction first, then interest reduction. If these are not agreeable, then request monthly payment reduction.
If you ask for all 3, the creditor will take the one best for them first, which is monthly payment reduction, and you end up paying too much interest. Lower payments, without the other two will only mean you are adding years and years to the payoff time. No bargain there.
If you have access to some money to make a large payment on a debt, you may want to consider debt settlement on some or all of your debts.
On secured debts, you risk losing the asset if you don’t keep your payments current. This includes your home, car, etc. These are priority debts to you, as well as priority debts if you decide on filing bankruptcy. Debt Collection Tips #4 – Do What’s Best For You
Whether you are speaking with creditors directly, or to debt collection agency representatives, remember, be honest, and don’t commit to payments you cannot make.
If you are in over your head, and debt collection actions are getting you down, you may want to compare ways to consolidate debts to get immediate debt relief and reduce your financial stress.
