Have you ever wondered about your rights in the event that you need to deal with a debt collector? Don´t worry, most people don’t know and that’s why you’re seeking more advice.
The extent of what debt collectors can and can’t do is widely ignored and that’s why people are so reluctant to deal with them. Furthermore, not knowing what to do or how to handle a situation involving a debt collector can end up in a bigger issue, like a legal feud or you can even end up paying more than what you really owe.
Debunking myths around debt collectors will give you more control over your particular situation and you will know what to do and what not to do under those circumstances.
If you ignore the debt long enough, it still won’t disappear
If this was true, no one would be in debt and we would just simply ignore them. Now, if you ignore debt for a substantial amount of time, maybe you’ll stop getting calls from the bank, but the debt stays there. .. and it all gets a whole lot worse eventually.
After the credit reporting time limit ends, it will still show on your reports and even after a long time it gets removed from your general records, the lender or organisation who you owe the money to will always have that record. It’s widely accepted that ignoring your debt will only bring you stress and anxiety for a long time for no good reason.
Debt collection gets removed right after you pay
Debt collectors will only report that you’ve paid your obligation. There’s no reason for them to remove the record from your history and they are not obliged to do so. You will see the update in your credit report after you pay, and this will definitely enhance your records, but don’t expect an immediate increase in your credit score, you just need to be patient.
You can ask debt collectors to stop calling you
Debt collectors are not obliged to stop calling you just because you tell them to stop. What they can’t do is call you at work after you tell them you can’t answer the phone during your shift. Also, if you tell them to call you at a different time, they cannot call again at the same time. If you want them to stop calling, you must write a letter to the debt collector asking for them to stop calling you entirely.
Debt collectors can garnish your salary if you fail to pay?
There’s a long legal process that must be followed before debt collectors or other businesses can have legal rights over your salary. You will have to lose a judgment after they sue you. If you fail to pay after a court tells you to do so, then the creditor can go back to the judge and ask permission to have access to your wages.
You can choose not to pay the debt collector and pay the original creditor
Sadly, it all comes down to the agreement between the debt collector and the business who you originally owed money to, no matter how much you wish to skip the collector and rather pay the original creditor.
They usually work under a contract so there’s no chance for you to skip the collector. Sometimes there’s no contract and instead, your debt was already sold to the third party, so legally you owe money to the third party and not to the original creditor.
Making a payment arrangement for less than the full balance will improve your score?
Settling debt is a good strategy, but it will only help you to take care of those negative account that must be cleared out. As far as your credit score goes it will remain the same. Settling debt is well seen by lenders but it will only have a positive effect if you continue to have a good, on-time payment history. Again, patience is required as none of these processes will happen overnight.
Debt Collectors are always right
Don´t make the mistake to believe that all debt collector calls are legitimate. Debt collectors can make mistakes because they have the wrong information. Moreover, there are some fake debt collectors that will try to take advantage of you based on past debt that has been either paid or cancelled. If you receive a call and you have doubts ask for credential and a debt validation before giving any information.
There’s a lot of other myths surrounding debt collection agencies, you just need to know your rights. Of course, you can use the whole experience to start building good saving habits and start working on ways to get out of debt.
Make substantial payments to reduce debt even if your score is not impacted immediately. Find out ways to boost your earnings so you can do this seamlessly. Many people are using the money they collect from mis-sold PPI and there’s a big chance you can be one of them and use the money to start clearing debt.