Posted: 29 Oct 2009 03:30 AM PDT
Nobody wants pick up the phone and hear a bill collector on the other side, but it happens. We overextend ourselves, buy things we can not afford, fall ill, lose jobs or some other emergencies arises and we start missing payments which eventually reaches a collection agency. Dealing with collection agencies is not always the first choice or a pleasant encounter; collection agents have a reputation of being rude, vulgar and harassing.For a short while after graduating from University I worked at a collection agency. It was not a lot of fun when I was told by supervisors and trainers to be harsher on customers and threaten them as needed. Not surprisingly I left the agency fairly quickly, but I learned a lot from the inside. I learned the laws as well as how agents manipulate these laws.
Should a situation arise where you have to deal with a collection agency I hope the following tips can help you through this awful experience.
Educate YourselfThe first thing you need to do is educate yourself. What can a collection agent say or do? When can they call? What are your obligations? Understand your rights as well as your responsibilities.
In Canada collection agencies are regulated by provinces, although most have similar laws, some details will vary. Here is the collection agency act for Ontario. In the US they have the Fair Debt Collections And Practices Act.
Do Not IgnoreIf the unfortunate happens and you do end up having an account in collections, do not ignore the calls and letters. Ignoring the issue will not get you anywhere, talk with the agent and try to find an appropriate solution for your financial problems. If it’s in 3rd party collection, the agent will have some discretion over the account.
Keep RecordKeep a record of everything you do and every conversation you have with the collection agency. If you mail a letter ensure it is registered and always ask them to send you everything in writing. Have phone conversations recorded, although you may need permission for this, it can go a long way when needed. Always ask for the persons full name and ID number, write down the time and date of the call.
What Collection Agencies CANNOT DoHere are a few things the collection agency cannot do:
Once an account is with a collection agency you can no longer solve the matter with the original creditor so do not try to contact them. You will only give yourself more headache and create confusion.
This is a guest article by Ray, the owner and primary author of Financial Highway, where he discusses investing, saving and practical money management concepts. You can check subscribe to his RSS feed or follow him on Twitter.
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