Nobody wants a letter from a debt collection agency. We associate them with burly men and lost belongings. There’ll be kids screaming in the corner while you plead them to at least leave the sofa. After all, that’s the way these things play out on television.
Luckily, the reality isn’t quite the same. In truth, a letter from a debt collection agency merely shows an unpaid debt has moved to a higher level. As this stage, the agency isn’t threatening to knock your door down. They’re reminding you of the money you owe and giving you a date by which to pay it. It’s only after that date that you’re at risk of things like repossession.
Of course, none of that stops you from feeling panicked. Thoughts about what could happen may start racing through your mind. In extreme cases, you may even fail to take action through fear. But, that’s never a good idea. That inaction could be the thing which leads you to your nightmares. Instead, then, keep your head about you and deal with this in the following ways.
Always Contact Them Back
If your debt has gotten to this stage, there’s a chance you’ve become adept at ignoring ‘final warning’ letters. Many of us stick these in a drawer without opening them. But, sticking your head in the sand is the reason a debt collection agency has intervened. And, the bailiffs will soon knock on your door if you continue along this vein. Instead, it’s crucial you take responsibility the moment you receive that letter. Phoning the company in question as soon as you’re able can go a huge way towards helping your case. Often, communications like these are all it takes to smooth things over to some extent. You’ll be able to find out where you stand and what your options are. That alone could go a huge way towards putting your mind at ease. The fact you’ve made contact also shows the debt agency that you’re cooperative. It’s also worth noting that fast contact is also essential if you feel you shouldn’t have received a letter. If you send a letter claiming you don’t owe money within 30 days, the debt collection company cannot contact you further. Make sure, though, that you have a valid reason for dispute. Be sure, too, that you send your letter by recorded mail so debtors can’t deny receiving it.
The art of negotiation
It’s also worth noting that you may not have to pay a debt in its entirety once it gets to this stage. There’s likely a fair amount of room for negotiation. The fact is that debt collectors want as much money as they can get from you. They already know you can’t afford the full amount. Besides which, it would cost them more than their money’s worth to send bailiffs to you later on. As such, opening up communications early also enables you to make the most of your negotiation skills. Most people in this situation only end up paying 30-50% of the amount they owe. As such, you may want to start negotiations at around 15% and see where you end up. Many people are embarrassed even to try this, but collection agencies expect you to at least reduce that bill a little. In extreme cases of debt, you may even chose to consider bankruptcy here. This is the ultimate negotiation in the fact that it wipes that sheet clean. Note, though, that this has repercussions of its own which you should consider before taking this option. And please, before you do this, contact me and let me work with you as your financial adviser (yes, I consult FOR FREE!) and see what we can figure out!
Consider quick ways to get cash
If you don’t even have enough to afford that reduced bill, it’s essential you consider ways to get cash fast. Failure to pay even then is sure to land you in further trouble. You’ll undoubtedly find that a collection agency will quickly lose patience after this. The thing to bear in mind here is that, if bailiffs do get involved, you’ll lose treasured possessions anyway. If things go that way, it’ll be traumatic for everyone. Instead, then, you may want to sell a few household items to cover that cost. Using options like Facebook selling sites or Gumtree could see you with the case in no time. In extreme cases, you could even turn to house buying companies who can pay you in cash for your house in as little as two weeks. These steps may seem extreme, but you stand to lose your assets anyway. Surely it’s better to earn from them? Note that, if you do take this path, it’s important you let the debt agency know. If they can see you’re making efforts to get the cash, they’re sure to grant you extensions for the cause.
Know your rights
If you’re unable to make the cash in time, the reality is that bailiffs probably will get involved. But, even that isn’t as scary as you might think if you learn your rights ahead of time. Shows like Lizard Lick Towing have given us an unrealistic view of this process. Anyone who’s watched that program will come to expect threats, foul language, and even physical violence. Newsflash; that’s nowhere near reality. The fact is that these people are doing their jobs. As in any professional role, they’ll treat you with understanding and professionalism. This is especially the case if you let them get on with what they have to do. Note that debt collectors should never use foul language during a repossession. Note, too, that you have a right to remain silent, and you should take it. If this matter goes to court down the line, your words will be used against you. Keep interactions short, and the process will be much less painful.
No one said that this would be easy. Debt destroys lives for a reason. Still, a letter from a debtor doesn’t spell the end. Keep your thoughts positive, and address this head on to get out the other end is as little time as possible.