Yes, debt collection tips can help. You may think you have no power when the debt collector comes calling, but think again! Creditors don't like losing out on the ability to collect money owed them. And most creditors will take steps to settle an unsecured debt to collect some money as opposed to no money. Tip 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! Tip 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. Tip 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 to file bankruptcy. Tip 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. Tip 5 - Know Your Rights The Fair Debt Collection Practice Act sets out exactly what creditors can, and cannot do, when talking with your about your debt. Don't be afraid, be informed! http://www.debtsteps.com/fair-debt-collection-practice-act.html Remember, being courteous and honest with creditors and debt collectors will go a long way in helping you to cope. No lies to remember, no self-induced stress, just honest communication to achieve your goals. |
