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How to Handle Debt Collection

May 26th, 2009

handle-debt-collection.JPGToday debt has become an integral part of our lives. Most people in the United States and several other countries have acquired the habit on taking debt in one form or another. Right from a child who borrows money from a friend to an adult who may borrow to meet his financial needs, each person has a reason to borrow money. As long as you are able to pay back your debt there is no problem; both you and the lender are happy with the situation. The problem arises when for some reason you are not able to pay money to the lender from whom you have borrowed. The collection agencies start calling you and even visit your place if you do not pay your dues. All this further affects your ability to pay back the debt. The situation becomes worse by the day, as you and your family suffer because of too many liabilities and snowballing interest charges. Here are some of the steps that you can follow when you are in such a situation:

Take Control

You should take complete charge of the situation. This not only means dealing with your finances but also dealing with debt collection agencies. It is important that you are firm when you deal with these agencies without sounding rude or angry.

Professional Attitude

It is very important that you deal with the collection agencies in a very professional manner. We should never forget that they are contacting us because we have borrowed money and we would probably do the same if someone was not repaying the debt that he has taken from us. Cooperate with them and don’t be aggressive under any circumstance.

Don’t Make False Promises

Never make false promises to get out of a certain situation. Many people promise the collection agencies dates by which they make the payment without having the finances to follow through on this. This will only spoil your image and they will not trust you when you give them a different date for repayment. Therefore it is very important to find out how much amount you can actually repay. Also inform them when it is convenient for you to repay the amount. All this will help in building trust between you and the lender.

Record Keeping

It is very important for you to maintain records of the amount you need to pay and the date when you have promised to pay them. This will not only help you to take control of the financial situation but also will help in keeping a check on the agreements made with different lenders. Once you have the details ready, no one can arm twist you into paying the amount prior to the due date.

Handling the collection agencies is one of the most difficult aspects of the entire process. Here are a few tips on how to handle these agencies:

Be Honest

Always be honest with the agency and the lender that you deal with. Clearly explain to them the situation you are in and how long it will take to clear the debt. Also inform them when and how they can contact you.

Negotiate with Lenders and Agencies

It is always better to negotiate with the lenders and credit card agencies and promise to give them an amount which you will most definitely pay. Always keep in mind that while negotiating with the lenders keep your interest in mind, not the interest of the lender. In some situations, you may want to send a letter of confirmation to the lender, which clearly defines the terms of the agreement entered between you and the lender.

Hence it is very important that you do not panic and resolve the situation as amicably as possible.

This article on how to handle debt collection was originally purchased from a member of the DigitalPoint forums under a private label rights license. It has been modified somewhat to improve spelling, grammar, keyword targeting, and general readability. Attempts to identify the name of the original author have been unsuccessful.

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