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What To Do If Your Debt Has Been Sent To Collection?
  • admin
  • November 22, 2023

What To Do If Your Debt Has Been Sent To Collection?       

To individuals, debt collection is no less than a financial heartbreak. You failed to pay the dues on time, and now the company wants the debt collectors to take the charge. It gets troublesome to encounter as no one wants to deal with debt collection agencies or further proceedings. There could be some reasons that prevented you from paying the debt. It could be income loss, financial fall or business loss. However, default payments in your credit report are not a good signal either.

You may be in trouble if you receive a few more calls daily regarding the debt payments. Declining or putting the calls on hold is not the solution. You must take practical initiative to deal with the situation.

However, analysing and taking the best step in this case is not easy. Non-repayment could lead to bankruptcy and further worsen the condition. Thus, improvise and analyse the possibility of solving the situation. The blog may help you decide the next best step to deal with the situation.

Let’s first understand the basics.

What can a debt collection agency do?

Debt collection agencies contact you and may take you to the court. They work on the lender’s behalf and sue you for the debt you owe. Moreover, they may take direct action if they win the case in court or you do not show up even after warnings. In this case, debt collection agencies take the money directly from the debtor’s account or tap belongings. They may also put a lien on your property.

However, debt collection agencies may not force you to pay the dues or nag constantly in some loans or debts like doorstep loans. Nonetheless, they may not sue you here, but you still owe the dues. The default may stay on the credit report for 7 years and impact your lifestyle and financial requirements.

Next steps to take after debt goes to collection agency

The first thing is not to ignore the emails, letters or calls from the Debt Agency. They may haunt you with the same unless you clear the debt. Instead, take charge of the situation. You must pay what you can realistically afford to at that time. Here are the next best ways to deal with the situation:

1)      Inform the agency of mental health condition

Debt Collection Agencies regulated by FCA set some rules to deal with debt retrieval. According to this, agencies must tackle the matter in a particular conduct. It includes dealing with mentally ill debtors. If undergoing a particular mental condition, inform the debt collection agency. They may then hand over the case to a specialist team. The team will decide the best way to deal with the issue.  Under this, they may:

  • Contact you only during specific hours
  • Contact you through specific ways i.e. by letter
  • May hold the proceedings for a while according to mental state

Moreover, the debt collection agency may write off debt here if there is no way to pay it back through assets or belongings.

2)      Negotiate with lenders

Identify whether you can pay the total debt amount. If not, then try to negotiate with lenders. Personally, dealing with lenders is better than having someone else to talk on your behalf. If they agree to negotiate, arrive at a reasonable amount that you can pay the lenders. It would help you reduce some debt off the credit report. Moreover, it would help you avoid nagging debt collectors and save yourself mental peace.

Apart from relieving the pressure from the debt collectors, it may also help your credit score in some way.

3)      Contact an expert debt advisor

If you believe you can pay the dues on time, contact a specialist advisor. He may help you present or prepare a budget that is available to pay the creditors.

Moreover, he may also help you pay the debt wisely. Check the best loan rates in the Ireland marketplace if you are low on cash. Some direct lenders may still lend you despite the nearing bankruptcy or insolvency.

However, you must tell the lender about your financial condition before taking up the loan. It will be the best way to avoid further distress. Analyse the best loan rates by comparing APR, interest rates and other loan costs like additional costs. It would help you reduce the total liabilities on the loan.

Once you have the expert on the board, he may help you with the best solution. He may assist you with the priority and non-priority debts to pay.

Credit card debts, overdrafts, payday loans, or short-term loans are generally low-priority debts compared to mortgage and car loans. Simplification makes it easier to deal with debt. However, do not delay the process of hiring one. Be mindful of the deadline that you must pay the dues within.

4)      Know your rights

Though debt collection agencies are responsible for tackling the debt by dealing with the borrower directly, you share some rights. Knowing what debt collection agents cannot do or pressure you into can help you avoid or deal with the situation better.

Checklist of what debt collectors cannot do forcibly

  • Speak to other people or disclose the financial situation to others
  • Add interest or charges to the debt
  • Threaten or abuse
  • Threatening to send bailiffs to recover money that they legally cannot do
  • Contacting you unreasonably
  • Force you to cover the misleading costs
  • Tricking you into calling them

Debt collectors cannot make decisions that may harm one’s individuality and freedom. If you encounter any such, report the authority.

5)      Double-check the identity

Sometimes, debt collection agencies mistake a name or two. It implies they intended to call someone else but called you up. Though you may have pending debts to attend to, it may not invite debt collection attention. This is because lenders provide 120 days to clear a debt. If you have not crossed that timeline on any debt, enquire. Ask the person to check the SSN or Social Security Number carefully.

 However, if it is a case of identity theft, you must report the case to the collection agency only. It would stop the debt collection agency from calling you multiple times. Additionally, never provide a complete SSN to a debt collection agency, just the last 4 digits. Check if they could match up.

Alternatively, if you have dues, the above-listed strategies may help you. You can hire the best expert or a person who can deal with lenders on your behalf. Meanwhile, you may encounter an emergency. With minimal savings and debt, you can borrow money from Ireland lenders according to affordability. It will help you counter emergencies without trouble. The loan approval depends on the amount you hold as debt.

Bottom line

These expert tips may help you deal with debt collection agencies. You can utilise the best strategy according to your personal circumstances and finances. Moreover, track your financial growth and choose the best financial advisor to help you re-finance or find a more suitable solution. Paying debt matters, but if you cannot, external advice may help.

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