http://financialrescuellc.com - Things you need to know about debt collection and tips to help you navigate the situation.

1. Debt Collection Woes: Facts and Tips to Help You Pull Through
It’s summer in the U.S. but a recent
study by the Urban Institute, a social
research think-tank reveals a chilling
fact about debt in America:
1 out of 3 adults or roughly 77 million
Americanswith a credithistory,have a
report of debt in collections.
The survey found these debts range
from as low as $25 to as high as
(gasp!) $125,000. The average was pegged at $5,200.
Many people are still feeling the effectsof the last economic downturn. With
an unstable economy, a dismal job market and the fact that almost
everything in America revolves around credit, you can easily predict that
millions of Americans will have a debt problem.
Nonetheless, life must go on. It’s no use blaming oneself or an unforeseen
circumstance for a current debt problem. The best thing to do now is figure
out what to do when you are part of the above statistic. Hang on as we
discuss debt collection and what you can do to pull through from this
situation.
First off, are you being haunted by collection calls even at your workplace?
If yes, then you have an account in collection.
Collection calls start flooding your telephone when you start missing
minimum payments. At such point, your account is already considered past
due and will be sent to your creditor’s internal collection department.
If you still can’t pay your debt by the 3rd month, then it now enters into a
“default” status. From there, between 3-6 months, it will go in either one of
two ways:
1. A 3rd party collection agency
2. In-State law firm

2. With an in-State law firm, there is a high probability of a lawsuit if you cannot
pay off your debt. To keep yourself away from this unnerving situation, it is
better to pay your debt while it’s still in your creditor’s in-house collection
department. If you can talk to them and probably make payment
arrangements, then you should be able to get back on current status.
If, however, a 3rd party debt collector gets hold of your account, it means
that your original lender has already written off your debtand has sold it to a
collection agency. You cannot bring it to “current” status again, and this will
have some serious ramifications on your credit report.
What are the types of debt collectors?
Not all collectors are the same. Although collectionagencies have the same
objective, they do have important distinctions. Let’s discuss some of these
below:
1. 3rd Party Collection Agency: This is when your debt can not be
collected by the creditor’s in house collections department any longer. The
debt has moved to another company/entity to attempt to collectthe full debt
amount. You will receive a letter to notify you that a Collection Agency is
collecting the debt in behalf of the original creditor.
2. Attorney Office Collections: This is when a law firm is hired to simply
collecton the unpaid debt. You will receive a letter to notify you that the Law
Firm has been hired to collect a debt in behalf of the original creditor.
3. In-State Attorney Office: This is when the law firm hired to collect the
debt is located in the same State in which the debtor resides. Similar to
Attorney’s Office Collectionsabove,but this type of collectionpractice has a
high rate of lawsuit.
4. Debt Buyer Agency: This is where a debt buyer company has obtained
your debt from the collections companies at a much lower amount than the
balance owed. By the time the debtbuyer company purchases your debt, it
has passed through many collectionagencies unable to collectand the debt
buys ends up pay pennies to the dollar for acquiring your debt. By this time,
you may receive a better payment option than previous collectionagencies.

3. If you happen to have an account in any of these collection agencies, you
might consider doing the following.
Contactthe collection agency or respond to their calls. And when you do,
talk to them politely and make monthly payment arrangements to pay the full
amount of your debt. Remember not to initiate a verbal war as this could
backfire against you.
If you plan to make a settlement offer on your own, that is, to pay your
account at a considerably lesser amount with a lump sum offer, that is also
possible.Be polite and firm with your offerbutbe carefulas well as this could
make or break your settlement.Obtain offers in writing and gather evidence
of your transactions, just in case things get nasty with your collectors.
Seek help from a debtsettlement company ifyou think you don’t have
the expertise to do deal with collectors and negotiation on your own.
Debtsettlementcompanies house professionals and expert negotiators who
know how to deal with collectors.That way, you can save time and effortas
well as increase you success rate at paying off your collection accounts. *
*Individual circumstances may differ and individual results may vary.