The average person is not very familiar with credit law, and that is why people will generally panic when they get a debt collection letter. The truth is that a collection letter is your chance to address your debt and try to make things right before they go to the next level.
By the time a debt gets to the point of generating a collection letter, it is already having a negative effect on your credit scores. Rather than worry about the effect on your credit score, you should focus on addressing the letter and the pending debt. You can always rebuild your credit score over time.
It is not necessary to hire a lawyer for a collection letter unless the letter specifically states that legal action is pending. If it does not mention legal action, then it is a reminder letter that is attempting to collect a debt. You need to keep a level head and treat the letter appropriately in order to take the right action.
– Verify the Debt
If you do not recognize a debt you are being asked to pay, if you feel that you have already paid the debt or if another collection agency has already contacted you about the debt, then you need to get your debt verified. There are form letters on the Internet that you can use to request that a creditor verify a debt. The creditor is asked to provide a copy of your original debt agreement and prove that the creditor is legally authorized to collect the debt.
When you mail the request for verification letter, be sure to send it certified mail and request a signature from the recipient. Once you receive validation of the debt, then you know you have to pay it. If you do not receive validation, then you should seek out the advice of an attorney.
– Address the Debt
Never ignore debt in the hopes that it will go away. A debt of significant size may become a lawsuit that you would be responsible for. Once you have received proof that the debt is indeed legitimate, then you need to face up to it and take responsibility for it. Call the credit collection company and talk about setting up a payment plan. The sooner you get the process started, the sooner you can start paying back your debt.
Before you ask for a payment plan, do not be afraid to negotiate with the collection company to try and get a better deal. Whether your debt is a few hundred dollars or a few thousand dollars, it is always in your best interest to try and negotiate the balance down before asking for a payment plan to repay the debt.
The most important thing to remember about a debt payment plan is that it is your last chance to take care of the obligation. Always make sure that your payments are made in time and that they are for at least the minimum monthly payment once you come to an agreement on a lower debt owed. You can expect unpleasant correspondence from the credit collection company immediately after the first payment you miss.
– Contact a Debt Lawyer
If you feel in over your head with the entire situation, then contact an attorney that specializes in debt services. There is no point in making the situation worse by being unsure of your actions and doing things that you have no confidence in. When the situation seems to be out of your comfort zone, then call in a professional to handle the situation.
The absolute best way to handle any outstanding debt is to address it before it gets to collection. We encourage you to contact us to analyze your debt situation and help you put together a plan that will help you to take care of your obligations. We will negotiate with your creditors to bring down your account balance to a level that you can handle before the situation gets out of hand.
We also encourage you to contact us if you get a debt collection letter and do not know where to turn. We can use our years of expertise to recommend a course of action and we can also offer our negotiation services to help bring a resolution to your situation that you can live with.