Debt collection agency is the agency that have been hired to collect a debt from defaulters. Sometimes these agencies are sold the debtors account, and they collect the debt from them. They are usually third-party people.
When do Debt Collection Agencies contact you?
Usually, your creditor would call upon the help of a debt collection agency when you have missed a payment even after constant reminders. You would have to look into the time allotted to you to pay your debts. Some people would reach out to collection agencies after six months, others within one month.
What to expect?
When a collection agency does contact you, you will be sent a notice, notifying you of your non-payment. They would ask you to validate the debt. By validating the debt, you agree that you have had taken a debt. More often than not, they would send a collector to deal with you. The collector will call you up on multiple occasions and even may call you upon your workplace. You need to know that the debt collection agency can only call you up between 8am and 9pm. They may also contact your relatives and friends, even though they cannot discuss their reason to do so.
How it Effect you?
Well, debt can ruin your credit score. And if you fail to pay your debt even after a collector has contacted you, a “collection” status will be updated on your credit file. This will reduce your chances of getting a loan from the bank when you need it.
The whole process of dodging from the collector and collection agency will leave you tired and miserable. You mental and emotional balance will be thrown off. When your friends and family are contacted; you would have to answer them to why a collector was looking for you. All of this will lead to unwanted stress.
What you can do
There are two options for you-
- You can ignore the calls and makeup excuses to why you are unable to pay the debt. If in cases, where you are in a tight spot, work with the collection agency and see if you can settle the debt.
- Pay the debt straight up and stop running from it. By paying up your debt, you can avoid the unnecessary trouble that comes with the collection process.
All of us have seen the movie-“Confession of a Shopaholic”. We know what getting into debt does to the relationships that we have. We also know how vicious debt collectors can be. So avoid getting in the situation if you can.