In our “do it yourself debt reduction” series, I wanted to end with a worst-case scenario. If your debt problems have become so horrendous that you are being hounded by collection agencies, it is time to get serious.
First, ask yourself some hard questions. How did I get into this mess? Can I change some things in my life to get back on track? Do I have some addictions or weaknesses that would prevent me from tackling my debt problems myself? If you are truly desperate, it is time to wise up and ask for help. If you think you can get up to bat and start fresh, then give this do it yourself plan a chance.
Whatever you do, don’t keep ignoring the problem. I have personally known individuals who change their phone numbers to prevent the collection agencies from calling. This is not a solution. You can’t keep running away.
No matter how bad it is or how long you have been hiding, instead, start today by calling them. Get in touch with every collection agency that has been hounding you. Begin the process of working with them.
If you don’t pay a loan or fine, often the company will give up sending you late notices and just turn your account over to collections. These agencies job is to get you to pay. They receive a large portion of the amount you owe as reward for their efforts. Most of these agencies know that they may never collect on these accounts. They are often very willing to negotiate, in order to see some financial gain from their hard work.
Just having a debt turned over to collections is bad for your credit. So, if you have any accounts that are threatening to send your debt to a collection agency – talk with them. Find a better solution up front. If you already have accounts turned over to collections, talk to the agency. Work up a solution that is acceptable with your budget. Negotiate a payment plan or balance reduction.
Then, once you have come to some resolution – request that the agency make a note on your credit report. Granted, the negative score will continue to stay on your report, but it will still look better if you have been working with them to resolve the problem.
Related Articles:
*DIY Debt Reduction – Get Rid of Stuff
*DIY Debt Reduction – Multiple Creditors