Collection Harassment Resolving Debt Pt. 2
Below is a MRR and PLR article in category Finance -> subcategory Other.
Collection Harassment & Resolving Debt: Part 2
Introduction
In this continuation, we explore more about your rights against harassment from debt collectors and discuss additional options to help you resolve outstanding debts. Please note, this is a guideline and not legal advice.
About the Author
I spent nearly a decade as a debt collector before health issues led me to leave the profession in 2003. My experience allowed me to excel and often resolve accounts deemed difficult by others. I hope to share insights that may be useful to you.
Options for Managing Debt in Collections
If your account is in collections and you're struggling to catch up, there are several options to explore.
1. Contact Your Creditor
Reach out to your creditor to see if they offer any programs that can assist you in managing your debt.
2. Pay the Oldest Debt First
While this won't completely resolve your debt, it can help prevent the situation from worsening.
3. Consumer Credit Counseling
Organizations, both for-profit and non-profit, can help you by consolidating your debt. The United Way is a good starting point. By paying a fixed amount monthly, they distribute it to your creditors. Many creditors offer benefits like bringing accounts current after three consecutive payments and reducing interest rates, typically to 6%-9%. Note that your account could be closed to future charges with this option.
4. Bankruptcy
Bankruptcy is another available route:
- Chapter 7: This involves liquidating your unsecured debt if the court approves it. You may still retain secured assets, but selling some belongings could be required. Consult an attorney to understand the implications.
- Chapter 13: This involves a repayment plan over 3 to 5 years for your overdue payments, alongside your current payments. You might pay all, some, or none of your unsecured debt. Legal consultation is highly recommended.
Once you've retained an attorney for bankruptcy, collection activities must cease. After filing, creditors must stop all collections against you.
Common Questions
Q: A collector advised against bankruptcy, saying it would ruin my credit for 10 years. Is this accurate?
A: Collectors aim to recover debts and may not present all facts. Bankruptcy can stay on your credit report for up to 10 years, but credit is still often obtainable, possibly with higher interest rates.
My personal experience after filing Chapter 7 due to overwhelming medical bills: Within 30 days post-finalization, I financed a truck and later acquired credit cards and a mortgage.
Q: I was four months late on bills due to job loss. I've since caught up, but my creditor won't amend my credit report. What can I do?
A: Creditors are required by the Fair Credit Reporting Act to report accurately. If you were late, they can legally report it unless there was a reporting error. However, you can add a personal statement to your credit file explaining any negative information, which lenders will consider.
Conclusion
Subprime lending and higher interest rates are obstacles, but communication with creditors and exploring credit counseling can offer solutions. Be proactive and informed about your rights and options.
Note: New laws might require exploring credit counseling before filing for bankruptcy. Always consult with a professional when considering these options.
You can find the original non-AI version of this article here: Collection Harassment Resolving Debt Pt. 2.
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