Debt Relief Tips - Getting Relief From Your Debt Collectors
Relief From Debt Collectors
By Daniel Cho
Debt collectors have been correctly labeled as the worst and most fearsome type of collection agents. These collectors have been known to strike fear and terror into the hearts of even the most hardened debtors and paralyze those who are trying to get their finances under control. Therefore, the first thing to do is take control, not only of your finances, but of yourself and any collection actions taken against you. Take control, don’t ignore collection attempts, and don’t be afraid.
Debt collectors operate from a computer driven database provided to them by the very people you owe money to, your creditor. By the time a collection agency buys your account, it has been ‘charged off’ for non-payment and sold for between 8 to 12 cents on the dollar. Debt collectors make their money off of commission, between 14-25 percent, and in their plight to stack commissions many debt collectors have stepped across the line of what they can legally do as well as the line of decency. Many debt collectors seldom use their real names, and usually ‘job hop’ or bounce from account to account, taking advantage of the anonymity of the telephone.
On the surface, the relationship between a debtor and a collector seems greatly uneven. Collector’s will see themselves in a position of power, many more than willing to take advantage of a consumer with several intimidation tactics. Many of which include calling you at work, threatening to talk with your family or neighbors, threatening wage garnishment, and in rare and extreme cases, threaten to arrest you. Consumers rarely complain about these tactics, but a smart consumer would review his rights under the Fair Credit Reporting Act. Learn exactly what the debt collector can and cannot do and challenge them on violations. Don’t forget though that the best approach would be a professional and honest one. Remember to keep your tone even, and to be honest to yourself and to the collection agencies. Don’t be afraid to tell them what day and what time they may call, that you are reviewing debt relief options, or how much you can afford to pay and when you can afford to pay it.
Several finishing helpful tips:
- Don’t forget that debt collectors are using a front to receive payment.
- Don’t forget your rights under the Fair Credit Reporting Act.
- Don’t forget that you are entitled to all information in relation to the debt, so ask for them!
- Lastly, try audio taping your conversations with the collector and letting them know beforehand. The word on the grapevine is that it should give them a good scare.
Daniel Cho is a financial writer for Select Debt Relief specializing in consumer debt and alternatives to bankruptcy. Currently he studies Business and Theatre Performances at the University of California at Berkeley where he is an active member of the Lambda Phi Epsilon Brotherhood- Delta Chapter, and Theatre Rice- Modern Asian American Theatre Performances.
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Debt Relief Tips - Debt Mistakes To Avoid
Debt Mistakes to Avoid in 2007
By Martin Lukac
Are you looking to eliminate your debt in the New Year? Knowing what you are doing wrong can help you to turn your finances around in 2007. Learn some of the common debt mistakes, then take steps to avoid them in the future.
Mistake #1: Ignoring your credit report
If you don’t check your credit report at least once a year for errors, you could be paying more in interest than you need to be. Your credit report not only affects your ability to get a loan, but it can increase your interest rates and your insurance premiums. Even minor errors can negatively affect your credit score. Make sure that you check your report at least once a year and take steps to quickly resolve any mistakes. If your report is accurate, take steps to raise your credit score, including lowering your debt and paying your bills on time each month.
Mistake #2: Not sticking with your budget
I know that it doesn’t sound fun, and it isn’t always fun, but it is necessary. Budgeting helps you get your spending in control. It lays out the plan for your financial future. The more you plan, the less stress you will have in the future. Keep track of what you are spending your money on, look for ways to cut costs and start paying off your debt. Without a budget, you won’t know if what you are doing is working or not.
Mistake #3: Leaving the cash at home
If you seriously want to control your debt and your spending, you need to start shopping with cash. Put your credit cards in a safe deposit box at the bank. Leave your checkbook and debit card at home when you go shopping. Take only the cash you have to spend. This will eliminate your spending more than you have.
Mistake #4: Paying the minimum amount due
If you pay only the minimum, you won’t be getting out of debt. Pay as much as you can each month towards your credit card debts. Educate yourself on the snowball debt elimination method. It is the most effective way to eliminate your debt.
Mistake #5: Paying your bills late
If you pay your bills late, you are paying too much. With a credit card bill, you will pay as much as a $39 late fee and your interest rate will be increased to 25% to 31%, depending on your card agreement. Other cards may see that you paid one card late, and they will raise your rate on their cards as well. If you miss your payment by 30 days, your credit score will be negatively affected. Pay your bills on time every month.
Mistake #6: Leaving your creditors wondering
If you don’t talk to your creditors before you start missing payments, you may not be able to negotiate with them later. When creditors see that you owe them back payments, they aren’t as sympathetic. When you know that you are going to have problems paying your bills, take the time to call your creditors right away. You can negotiate a lower interest rate or extended payment deadline if you call before you miss that first payment.
Martin Lukac represents RateTake.com Mortgage mortgage marketplace. RateTake matches consumers with multiple lenders offering low mortgage rates from our network of accredited lenders.
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