If you’re behind with bills and debt collectors are involved, it can be a scary time. Even though the industry is regulated, there are shady companies out there who prey on those who are unable to stand up for themselves.
It’s bad enough being sent letters or being called by a bank or other creditor. It’s a whole new situation when you’re being called or visited by a debt collection agency.
But there’s nothing to fear.
Even though these agencies tend to recruit a certain type of person, they are limited in what they can do and only want to get paid.
Here are a few tips for dealing with them.
Don’t ignore debt collectors
Debt collectors, like debt, aren’t going to go away. The longer you avoid them, the more punitive charges they might add to your debt.
It’s harder, but also easier, to deal quickly and efficiently with them to settle whatever is outstanding.
Don’t ignore their letters or their calls. They will only start visiting you if you do.
Check and verify the debt collector
Unfortunately, debt collection attracts scammers as well as shady firms. Just because someone contacts you telling you that you owe money, doesn’t mean it’s true.
Ask them to tell you who they are, their business address, who the original creditor was and perform some research.
Don’t offer any personal information in return, however much they ask. Tell them you’ll contact them using their published phone number and cooperate once you have verified them.
If in doubt, contact the company you owe money to. If the debt is real, they will say it has been handed over to a recovery agency or words to that effect.
Ask for the name of that agency. Not everyone will tell you but some companies might.
Check and verify the debt
Before you pay anything, double check the who and how much of what they say you owe.
Any letter you receive from the debt collector should outline who the money was originally owed to, for what and how much.
Double check your own records to make sure it’s accurate.
Mistakes do happen and with COVID and cutbacks, fewer staff are working longer and harder, so it makes sense to check.
Credit recovery agencies have 6 years to recover debt before it expires. Bear that in mind when being asked for money.
Negotiate a payment plan
If the debt and debt collection agency is real, negotiate with them as much as possible.
Show willing, tell them you intend on paying back the debt but also tell them you can’t afford to pay it all off in one go and can’t afford the debt as a whole.
Many debt collection agencies buy debt for pennies on the pound, so making any offer to repay the debt means profit for them.
Have a figure in mind from the original amount you owe and offer to repay it over a period of time.
Once agreed, ask them to verify the agreement in writing and you’ll begin paying.
Never pay without that agreement in writing. There’s no proof an agreement was made and that could come back to haunt you.
Make your payments on time
Once you have made an agreement, try to stick to it as much as possible. If you fall behind or miss a payment, the recovery agency won’t be so amenable to working with you.
Keep them on side, honour your side of the agreement and you’ll have very little to do with them until everything is paid off.
If you’re in real trouble or don’t want to deal with debt collectors, work with Citizens Advice or a debt charity. They have resources to help and can assist manage the debt and the agency.
