Advice on Collecting a Debt You’re Owed

Even with the recession and economic troubles of the world, there are a multitude of provisions in place provide for anyone hoping to survive in this economic downturn. These structures and provisions are in place, even for the situation surrounding around the circumstance of debt. However, you might be the person that is owed money. The following paragraphs serve as an explanation for those who are trying to collect on debt owed to them.

A Group of People at Work Throwing Papers

To begin, it is essential to clarify that the collection of debt can be known as many things: loan consolidation, debt retrieval or debt restructuring. The process will depend on how much is owed and the agreement that the debtor would like to get into agreement with you iva. In most instances, debt is usually owed for a mortgage, car or on a credit card. Regardless, of the reason it will be necessary to start the process to recover the debt in a calm and formal manner. It is best to start now as the longer you leave the debt, the less likely it will be repaid.

The first step is to notify the debtor that they owe an amount of money to you and they repayment is expected by a certain deadline. This should be done by sending them a formal letter. Notification by word of mouth or telephone call can be disputed. In some states, it is illegal to tape phone calls, so keep this in mind if you think about doing so.

In the letter, you can stress that the debt must be paid back by original deadline or you can choose to extend the original deadline for the payment of debts, if you and the debtor come to some agreement. However, the debt accumulates when the debtor is unable to repay the amount borrowed during in the short or long-term time frame you have given them. The majority of debtors may be until to redeem the debt and this becomes an issue with the debtor’s account as it gains interest and grows.

Notifying the debtor is key to starting the process to recovering the money. This is imperative. Similarly, the debtor should be told of your further actions if they choose not to respond or to do not start making payments towards the debt. This could mean contacting a debt collection agency to deal with the debt or taking the person to court to recover the debt yourself.

In the present climate of easy credit it is easy to get in over your head with credit card debt. Many people do not realize how many Americans are living payday to payday getting deeper and deeper into the drowning pool of high interest revolving debt. With recent laws mandating higher minimum monthly payments and stricter bankruptcy laws there are those who may feel they have no options. A program tconsolidate debtmay be the answer for these people. If you are one of those who is struggling with a staggering load of debt you may want to think about a program such as this.

There are two steps which will start you on the road to a debt consolidation program. First, gather all of your bills and make a list of the monthly payments you are making and the interest rates you are being charged. Second, access your credit report online. If you have not received a credit report during this calendar year you are entitled by law to a free report from each of the three credit reporting agencies. Your credit report will tell you how many times your payments have been late or missed. It will also give you contact information for all of the companies to whom you are making payments if you do not already have it. Combine the research from your bills and from your credit report to ascertain exactly how much you pay monthly, how much you owe and what your payment record is.

When you obtain your credit report, you should also purchase your credit (FICO) score which should be available from the same sources for a nominal fee.

Armed with this information contact several debt consolidation programs. Sources for such programs can be your banking institution, the yellow pages, the Internet, the Better Business Bureau and The Chamber of Commerce. If you know others who have had similar problems you might ask them for personal recommendations. Churches may also be a valuable resource for debt consolidation programs. Some religious organizations even operate such facilities.

Even though debt consolidation programs advertise themselves as services they are also money making concerns. Therefore, when deciding upon the one to use you should be wary of them as you would be when making any financial commitment. The purpose behind a debt consolidation program is to have the company deal with your creditors. Negotiating a reduction in your credit card interest rates, asking for reduced fees and longer repayment plans and other debt restructuring is a tedious process. It often requires a lot of cross mailings and telephone calls. Once you are in a debt consolidation program the company will take care of these matters for you. In order for the program to be successful overall you must make sure you choose a company that will deal fairly and competently with both you and your creditors.

Interview the prospective debt consolidation programrepresentatives just as you would an applicant for a job. These people will, after all, be working on your behalf. Make sure the tasks they will do for you and what they hope to accomplish are clearly defined. It is also imperative to have a written breakdown of the fees they charge. Ask them to give you a breakdown of how much of the payment you make to them will go to the credit card companies and how much they will keep as the cost of your participation in the program. Once they have negotiated the reconfiguration of your debts with the various credit card companies the debt consolidation program should furnish you with a copy of the negotiation results. It should stipulate how long it will take for all of your debts to be paid in full.

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