Being in debt is no fun and have debt collectors calling and emailing, asking for money, is no fun either. The worst thing you can do is ignore their demands. Believe it or not, they are actually there to help you. Instead, they just hang around our credit reports for years to come, making every attempt to establish credit or borrow money more difficult.
Instead of hiding from debt collectors, you might want to start thinking about working with those collectors to pay off your outstanding debts.
We put together a list of five reasons why you should talk to your debt collector:
1. No More Collection Calls
First of all, you won’t have to deal with phone calls or letters from collections agents once your outstanding debts have been taken care of. This means no more calls during dinner, no more demand letters, and no more worrying that the wrong person will find out your little secret.
2. Start Improving Your Credit Score
Many people who are struggling with unpaid accounts in collections fall into the trap of believing that fixing their credit score is a hopeless mission that they can never be successful at. However, there is actually a ton of evidence that anything is possible when it comes to your credit score if you are simply willing to take the first step and pay off your outstanding collection accounts.
3. Get Approved for Credit Cards
Applying for credit cards is one of the most common methods of improving or repairing your credit score, but many credit card companies will not issue new credit to consumers with outstanding collection accounts. In order to qualify for a new card to start rebuilding your credit, paying off those old collections is definitely going to be a must.
4. Avoid Ending Up in Court
One of the most frightening aspects of an outstanding collection account is that the creditor or debt collector can sue you and make you appear in court regarding the outstanding balance owed. And if they are awarded a judgement against you, they might even be able to garnish your wages in order to guarantee what they are owed.
The best way to prevent court appearances and wage attachments when it comes to outstanding accounts in collections is to simply work with the debt collectors from the beginning to pay off the amount owed in a reasonable time period.
Of course, the simplest way to make sure that you don’t have outstanding collection accounts counting against your debt-to-income ratio is to take care of those accounts as quickly as possible after finding out about them.
5. Less Stress and Anxiety
At the end of the day, having outstanding debts of any kind has the ability to exponentially increase the amount of stress and anxiety in your life. By paying off those debts, you will find that you can almost instantly decrease the amount of stress and anxiety that exists around you.
No matter how much you might owe in outstanding collection accounts, stashing those letters away in a drawer and avoiding the phone calls is almost never the right thing to do. If you are open and honest with the debt collectors, there is a much better chance of them working with you to take care of the outstanding accounts and then you can move on with your life.
 | About the Author Adam Stewart is a Debt Collection Expert and owner of ADC Legal Litigation Lawyers, a legal practice specialising in commercial advice and litigation, debt recovery and insurance claims recovery disputes. For more information, email us at email@adclegal.com.au or call 1300 799 820. Talk to us about your litigation or dispute concerns via Skype at adclegal. |