Bad Debt Collection
Unfortunately, bad debt collection cannot always be avoided but there are plans and services that can help to prevent against such an event. Thousands of people find themselves in tough financial situations with seemingly now way out, which are made worse by collectors who try to force debtors into payment by harassment or threats. Hope is hard to retain in tough times, however, those who find themselves in seemingly hopeless situations can hold onto the fact that there are services and laws to assist in any way possible, as the Psalmist states, "Thou shalt guide me with thy counsel" (Psalm 73:24).
Laws and services have been instituted in for the express purpose of protecting people from bad debt collection. For example, he Fair Debt Collection Act was put into action in 1977 in order to protect those with consumer debt from verbal harassment from third party debt collectors. Collectors break the law if they insist on hounding a person by phone call, use abusive language, or threaten to involve neighbors and other family members. Those who are under debts that they perhaps have a hard time paying, still have rights that can and should be protected. In addition to the law, many companies have taken to heart the desire to make sure that the law is upheld and that debtor's rights are protected.
There are several companies that are intended to protect debtors. Such agencies are made up of financial advisors, experts, and occasionally lawyers and attorneys, all for the express purpose of providing services that clients can trust and place confidence in. Many services can be found that assist and aid those in need with every aspect of financial management and tips to ward off bad debt collection. Such agencies guarantee not only results but that clients will be treated fairly and in a friendly manner as those who run the services desire to help in any way possible. The task of recovering debts in accordance to the FDCA is what such companies pride themselves on.
People who are in need of financial assistance or those who are seeking to find solace from bad debt collection can easily find what they require on the Internet. The technological advancements in recent years have allowed for a virtual explosion of companies, groups and organizations that conduct business electronically. Debtors can a plethora of web sites that explain in detail, the rights protected under the FDCA, and what actions can be disputed by law. Not only are copious amounts of information readily available to those in need, but so is consultation and counseling, occasionally free of charge. Most banks and lending agencies have web sites which clearly explain all the services that are offered, and ways in which a person in need can easily get in touch with a financial advisor. Web sites also offer tips, suggestions and advice on how to get out of from under debt quickly or how to avoid falling into a position with seemingly no way out.
Personal finance management is important for everyone, and especially for those who find themselves in a monetary tight spot. One of the best ways to prevent against bad debt collection is to avoid debt altogether. There are several ways in which people can avoid debt, such as adequate money management. Many programs are available to those who desire to take charge of personal finances, and by doing so people are able to have a clear idea on where accountants and assets stand in relation to how much is required for the payment of bills and living expenses. The most common way consumers fall into tough situations is due to overspending. Consumers who rely on credit cards and other forms of easy payment can easily overspend. The act of spending more than is made in a regular paycheck is not only dangerous, but doing so can lead to further complications. Loans are available with the purpose of helping those in need, however, the loans must be paid within the terms of the agreement, otherwise a person might hear from a bad debt collection agency.
Those who arm themselves with knowledge are better equipped to handle tricky situations can arise in the natural course of financial life. Smart planning is vital, and those who have long term plans with attainable goals have a much better chance for success than people who do not. However, unforeseeable events do arise and force people into debt no matter how well prepared they might have been. The unexpected loss of a job and additional expenses can land a person into a very tight spot. The most important action people can take to prevent against bad debt collection is to get in touch with a credit counselor. A counselor can help to draw up a plan that will help protect a debtor, and also act as liaison between the debtor and the creditors in question. The first step should be to contact creditors with the purpose of informing about a debtors situation before legal actions are taken. Many times creditors will work with a person in the formulation of plans for payment in attempt to avoid involvement by the court system.
Bad debt collection can be avoided if debtors are careful to do all that is possible to follow the terms of agreements. Those who find themselves with too many bills and not enough funds do have options that should be enacted as quickly as possible. Credit agencies and counselors can easily be found to help those in need, and to assist in the formulation of plans that will appease all, creditors and debtors alike.
Bad Debt SettlementBad debt settlement is for the consumer who is delinquent on high interest credit card debt and would like to offer the creditor a percentage of the total balance for payment. This can be done through negotiations by the debtor or the debtor can choose to hire a company who specializes in bad debt settlement. When negotiating a delinquent account it may lead to dealing with a third party collection agency. To save money a debtor should consider negotiating with creditors without having to pay for services. If the negotiations are not successful then find a reputable company that has experience with making payoff negotiations and give them a try. After an account has been delinquent for some time a creditor may be willing to negotiate if the payoff can be sent immediately in a lump sum amount.
A consumer who wants to do the right thing and pay off her debts should consider working on one account at a time. Call the creditor and tell them how much you can give them in total and see if they will accept the offer. If not then set up a payment plan with them if they will agree to cease collections and stop all interest charges and late charges on the account in question. Bad debt settlement can be accomplished but it may take some time to settle with every creditor. This will depend upon how much money is available and how much creditors are owed. "Then she came and told the man of God. And he said, Go, sell the oil, and pay thy debt, and live thou and thy children of the rest" (2 Kings 4:7).
When handling bad debt settlement the debtor should put all agreements in writing. The first letter should be a contact letter to let the creditor know that you are trying to do the right thing and would like to make an offer for negotiations of the balance owed. Then send a letter with an offer for 40% of the balance owed. If the creditor will not agree to that then send counter offers of 50% to 60% of the balance owed and see what happens. Most creditors will be happy to make a settlement especially if the account has been past due for awhile. Be sure and note any conversations over the phone and back them up with a written letter.
Making a settlement may take some time but the process is worth the effort if the creditor is willing to negotiate. While sending letters for offers on the payoff negotiate with the account holder to remove the bad item from your credit report or at least show that the account was paid off. Bad debt settlement can result in a positive influence on one's credit report but this is something that should be settled during the negotiation process. In addition, the creditor should be willing to stop all collection attempts during the process of settling the account especially any types of harassment for payment. Companies that negotiate for debtors will usually send out an initial letter stating that they are handling their finances and will be contacting them for payment arrangements. They will also ask that they contact them instead of the debtor for further payment information.
Companies that offer their services to help negotiate bad debt settlement for potential clients will want to evaluate their financial situation and make some suggestions. Financial counselors can provide services to help the debtor plan a budget and formulate a plan for paying off obligations. Negotiation with creditors may include paying so much per month with the agreement of no more interest or fees being charged. Companies who offer debt settlement services may ask the client to open an account to deposit money into that the company has access to so that the bills can be paid on time each month or the settlement amount can be paid on time. Debtors that have the funds available to pay off creditors with a lump sum may be able to take care of this type of agreement without a financial liaison.
Hiring a company to negotiate payoffs on past due accounts means making a commitment to the creditor that must be honored. Making a payment late could lead to the creditor claiming default thus making the agreement null and void. To make good on a commitment the debtor must keep a tight rein on spending by learning to live on a budget. A bad debt settlement can not be successful unless the debtor understands the seriousness of the responsibility involved. Determining why there is not enough money to stay caught up on bills is the best way to start so that the situation is not repeated. Then making a reasonable budget that will work with the plan to pay off creditors is the best way to try and make this type of commitment work.
Services offered by companies for bad debt settlement is not usually a free service. A fee must be paid before the negotiations start. Then many charge a monthly service fee for negotiating with creditors. A debtor should consider the costs before using this type of service. Talking to previous customers who have had successful outcomes might make paying the fees worth it. The debtor should do some research on different companies before making a final decision on who to use. Another consideration might be a non profit organization who gives financial advice without charging a lot for their services.