Do You Know How To Handle Collection Agencies?

Good people are falling behind on their bills faster than ever before because of the poor economy. Otherwise responsible people are now finding themselves being turned over to collection agencies because they’ve either lost their jobs or have seen a dramatic reduction in the amount of money they’re bringing home every month.

Dealing with collection agencies is no picnic, and many people feel ashamed and embarrassed when they find themselves on the line with an overzealous collection agent, but there are a few points you should keep in mind that can help you through these tough times.

Why do collection agencies even exist?

It’s true that many people wish these agencies would just go away, but the fact is that they do provide a valuable service to companies that hold consumer debt. A collection agency will often buy these debts at a fraction of their face value. This benefits the debt holding company because they realize that the longer that a debt remains unpaid, the less chance they have of ever seeing the money. By selling the debt to a third-party agency (called a charge-off), it allows them to recoup some of their losses and hand the headache of going after the money to someone who has more resources at their disposal.

How collection agencies operate.

Generally, once a collection agency like Pay Star purchases a debt, they will send out a standardized form letter to “remind” people that they owe money. It’s important to not take these letters personally because they’re usually mass produced and sent out to thousands of people. If these initial letters fail to generate a response, they may become less friendly as time goes by.

Every collection agency should provide you with proof that you do indeed owe the money they’re intending to collect. If they don’t you have the right to request that documentation and they have to give it to you. Errors to happen and you don’t want to be paying for a debt you’ve already paid off or that you don’t even owe. So, if you do get contacted by a collection agency, make sure they give you proof of the debt.

It’s always a good idea to respond to these letters as soon as you get them because you can often avoid letters with a more threatening tone and embarrassing phone calls.

When you do respond, it’s always a good idea to make some kind of payment arrangement, even if it’s not what the collection agent wants. Remember, these agents often get a commission or percentage of the money they collect, so they’re always going to push hard for the full amount right now. Pay what you can because they can’t in good conscience turn you away if you’re honestly trying to pay off your debt.

Some debt collectors will become hostile and threaten you, but it’s important that you remain calm, and on track. While they may threaten to take your assets to pay off the debt, they’re not legally allowed to do that. And when it comes to lawsuits, most companies don’t actually sue even when they threaten to do so, especially when dealing with small debts.

Also, don’t be intimidated by payment deadlines. Many debt collectors will say that you must pay by a certain date or further collection actions will be take, which usually means just more letters being sent.

What about those phone calls?

The last thing anyone wants is to have to deal with a debt collector over the phone, but they usually only resort to calling when their letters generate no response, which is why it’s vital to take the initiative and contact the agency as soon as you get a letter.

Also remember that many collection agents are working off a script and that their enthusiasm is fueled by frequent performance evaluations and personal commission payments. The size of a collection agent’s paycheck is largely dependent upon how much money they can get from the debtors, which is why they’ll often resort to any tactic they can to get you to pay up. Debt collectors are prohibited from revealing the nature of the call to anyone other than the debtor, they can’t even leave a message on an answering machine stating why they called. Usually, they’ll simply say, “This is Joe Horspadorsky and it’s very important that you return my call.”

So, what can collection agencies really do to you?

Many collection agents are under a lot of pressure to get money out of the debtors and while most work from a script, some will say whatever they think will work, most of which sounds frightening to the debtor. But the fact is that a collection agency cannot seize your assets, nor can they have you thrown in jail. They cannot call your boss and try to get you fired from your job and they absolutely cannot threaten any kind of physical violence. While most debt collection agencies like Pay Star are reputable, you do have to keep your guard up and know your rights when dealing with these kinds of firms.

Keep in mind that it’s always better to pay off your debts, even if you can only pay a little at a time, than it is to ignore them. Collection agencies can report you to credit bureaus, which can negatively affect your credit score.

If you’d like help paying your debts, you can visit Pay Star at their website, www.paystarintl.com.

Additional Resources

Paystar International :: Home Page

Paystar International :: Article on Betaflow

Paystar International :: Listed on Review-inc.com

Paystar International :: Information on Incprofile.com

Paystar International :: Article on 800review.com

Paystar International :: Article on 4WorkLife