Debt is a common issue in the U.S., and when borrowers are unable to pay back their debts on time, lenders eventually send the debts to collection agencies. These companies call, email, and send letters to debtors on a regular basis to attempt to collect payment. If you’re being harassed by creditors and collections agents or have considered filing for bankruptcy, use the following guide to take control of your finances.
3 Ways to Manage a Debt in Collections
1. Authenticate the Debt & Agency
First, check your credit score to make sure that the debt is yours. If you don’t recognize the company asking for money, you could be the victim of a debt collections scam. Use your loan agreement or online banking portal to verify the amount they claim you owe is correct.
Next, verify the age of the debt—depending on your state’s statute of limitations, you may no longer be responsible for the debt.
2. Make a Deal
In some cases, a creditor may be willing to renegotiate. For example, if you owe $10,000, they may be willing to allow a payment plan where you send $400 a month for a little over two years.
For people with substantial amounts of debt or no reliable income, this may not be a viable solution. In this case, ask your creditor if they are willing to negotiate a settlement. You’ll pay less than what you actually owe, but your creditor will get a substantial sum right away.
3. Turn to a Debt Consolidation Lender
Some lenders specialize in debt consolidation loans, which allow debtors to transfer the amount they owe to a new creditor. This way, the debt is fresh, and is no longer considered to be “in collections.” This will eliminate the harassing calls, emails, and letters from the collection agency, and enhance your credit score.
Now that the debt is no longer past due, you can pay off the sum at a rate you can manage.
If you’re not sure how to handle your debt settlement, or you’re considering filing for bankruptcy, reach out to The Law Office of J. Baron Groshon for help. With locations in Charlotte, Concord, Gastonia, and Lake Norman, NC, you can get the financial guidance you need close to home. You can turn to Attorney Groshon for guidance on your Chapter 7 or 13 bankruptcy case, as well as estate planning services. To arrange for a free consultation, call (704) 342-2876. Visit the website for more information.