Posted on Thursday 04 October 2018
It goes without saying that financial lenders expect to get their money back. The borrower (i.e. the individual in debt), however, may not always be able to pay back funds that were loaned to them. After a certain amount of time passes, financial lenders may decide to contact a debt collection agency, also referred to as debt collectors.
Debt collectors are simply members of companies who are tasked with the responsibility of collecting unpaid debts. Collectors must also adhere to certain rules and guidelines as they work to make borrowers pay up. First and foremost, collectors cannot contact people before 8 AM or after 9 PM. They are also prohibited from making back-to-back calls and, in certain cases, debt collectors cannot call borrowers at their places of employment. However, members of debt collection agencies are allowed to send texts, emails, letters, and, of course, make calls, so long as they remain in accordance with the aforementioned stipulations.
There are a variety of ways people can go about managing debt collectors. Indebted individuals can either pay off the debt or ignore the debt collectors altogether. Obviously, the former option is more advisable than the latter. However, there are many people who simply don't respond to collectors in the hopes of them eventually going away. More often than not, setting up a payment plan with the collections agency is the best route to go. Ignoring debt collectors is extremely risky, seeing as they can initiate lawsuits which can subsequently lead to wage garnishments. Most collectors are more interested in getting individuals to pay up than they are in going through legal battles. Even so, those who willfully ignore debt collectors are doing so at their own risk.
Debt collections are absolutely terrible for any person's credit. If you're looking to advance your career seamlessly without accumulating debt, then you should take your debt repayment seriously. Collections can prompt extreme declines in one's credit score; the individual may also be subsequently denied cash loans or credit cards in the future. Some people may believe that they can counteract the damage with certain practices, but this is more difficult than most realize. A debt collection account can remain on an individual's credit report for as long as seven years. The only true way to reduce the damage is by paying off the debt. With time and other positive financial habits, the damage will eventually subside.
The surest and most effective way to avoid debt collections is by not going into debt. This is quite simple, yet still remains a feat that countless people struggle with. Having a budget, saving money, and living within one's own means are some of the best ways to steer clear of debt. You are furthermore advised to stay away from loans when you don't need them. Additionally, do not swipe your credit card unless you know you'll be able to pay off the balance when the time comes.
Authored by Gabrielle Renee Seunagal