Step By Step Process To Debt Settlement With Collection Agency To Become Debt Free
Many people will generally get panic when they receive notices from debt collection agencies and are not aware of the risks that are associated with accounts that are delinquent as the creditors have many options available for them to recover their amount. For this reason, I meant to write this article to help the debtors in an attempt to become debt free.
If you do have delinquent accounts, don't get panic with the collection calls that you may receive from the debt collector. Instead make yourself aware of the ways that are available for you to get out of debt. Here are the steps that one should follow when dealing with debt collection team.
Before negotiating with debt collectors, you should check for statute of limitations related to your debt and for your state. This is something that tells you how long the debt against you can be collected. To find this information contact attorney general of your state.
Next thing one must look for is about how many years your account is delinquent. Suppose your account is delinquent for 6 years 5 months then the delinquent account on your credit report will come off in other five month. If you have paid any amount and bring the account to current then in any case you fall delinquent will ruin your credit score further. Therefore it is mentioned by many experts that bring the delinquent account to current will not improve the credit score especially after such a long period when the entry on the credit report is to come off. If you still see the entry on your credit report about the delinquent account even after 7 years then you can challenge in court of law.
Third, before negotiating your debt with debt collectors, see what type of debt you hold, whether it is secured or unsecured. This is important because know what type of debt you hold will help you in proceedings with getting out of debt as the debt settlement deals with only unsecured debt. Unsecured debt includes personal loans, medical bills, department store cards and credit card debt. Settlement is possible with unsecured debt because there is nothing attached with amount in debt that allows the creditors to recover money by selling the underlying when the debtor defaults. In such cases the lender in an effort to recover as much as amount possible comes forward to settle the debt with debtors.
Knowing this start negotiating with creditors to settle the debt. In an effort to settle the debt with collection agencies, never make a mistake of calling over phone as they may behave rudely over phone. Therefore, contact with collection agencies with letters only.
Ask for debt validation from collector that you owe money to them and that should contain a proof that a collection agency that you are negotiating is assigned to collect debt by original lender. It should also include detailed payment history starting with original creditor and copy of original agreement signed with original creditor or credit card application.
If the response to your validation letter is not satisfactory, then you can inform the debt collector as he is violating collection act and you can sue them.
In case you are not comfortable dealing with creditors or collection agencies, try settling out the debt with companies you owe to get out of the debt.