Copyright: Champion studio / ShutterstockMost people find it hard to pay off their debts. In fact, you may end up missing payments because you forget the due date, which can be a real pain because of the penalties you have to deal with. For instance, you may want to buy a brand new car or other properties, as well as refinancing mortgages. Then, once you go through your credit report, a new collection item shows up, and this is not at all beneficial to your financial records. After all, an account that is in collection brings your credit score down, so you are unlikely to get another credit.
In the same way, improving your credit can be very tough when you have a new collection. Plus, there are other hassles you have to think about along the way. Collection letters, calls, harassment and lawsuits by various collection agencies may come your way, which add to your stress level. Of course, there is also the possibility of undergoing bank levies and wave garnishments, among a few other consequences.
Regardless of your current situation in the collection process, make it a point to understand your rights that can spare you from so many headaches along the way. Moreover, you have to be aware of the fact that when it comes to handling accounts, there are various ways to do this. So, check out the following steps you can apply in paying off your debts – even when you are in collections:
- Make a decision whether to pay your debts or not.
Initially, you have to determine first if those debts really belong to you or someone else. There are instances when some collection agencies demand people to pay a certain amount that is not even intended for them. Hence, you need to submit a debt validation letter to make sure all the items in the collection letter are for you. Old debts are possible not collectible, yet a creditor can still sue you. Once debts pass the deadline, though, you can present a defense in the court to throw the case out.
- Determine your means of paying off your debt.
After checking if all debts are yours, you can begin checking on the different ways to pay these off. Naturally, the strategy you choose is affected by your financial situation, as well as the amount you need to pay. Some options include a debt settlement program, declaration of bankruptcy, and negotiating settlement.
Keep in mind that even if you are in collections, it is still possible for you to work out a way and get out of this mess. Just make it a point to consult a professional for legal advice, which includes an experienced lawyer in this situation or a debt settlement firm. Despite the stress that you may be going through, never let collectors bully their way around you. Have your debt validated, understand any scope of limitations to determine whether you are required to pay this off. Lastly, select a suitable debt relief program that meets your situation and financial concerns
