It can be uncomfortable that if you receive a letter of demand or phone call from a debt collector, however it may be unavoidable if you do owe someone money and it’s in serious arrears.
What To Do When You Receive Letter Of Demand From A Debt Collection Agency?
First and foremost, don’t ignore the letter, read it through and find out what the debt collector is demanding, who is the creditor, and whether you owe the money? If your answer is no (eg the debt is for someone else), reply to the debt collector and let them know that they sent it to a wrong email address, and explain to them if you have any clue about the actual situation. The debt recovery agency should then reinvestigate the matter, find out the correct contact information, and pursue it.
If You Owe The Money Stated On The Demand Letter
The best solution is to actively work with the debt collector to resolve the matter, so you can avoid unnecessary phone calls and letters which may be uncomfortable. Generally speaking, debt collectors won’t bother you if you are on the right track.
If You Are In Financial Hardship
Where possible, pay as per demand letter you received from the debt collection agency. Otherwise schedule a payment plan with them if you are experiencing cashflow difficulties or financial hardship, tell the debt collector your situation and provide evidence to demonstrate it (such as a bank statement or receipt from Centrelink), so the debt collection agency would be able to convince the creditor and accept your proposal. Remember, debt collection agency is not the decision maker, however they do have abilities to provide suggestions and recommendations to the creditor. It is reasonably foreseeable that the creditor would require a payment plan that you may be unable to afford, and you want to schedule a payment plan where cannot be accepted by the creditor– evidence of your financial situation is the key to solving this situation, demonstrate to the debt collection agency how much you can afford, then they will be more likely to compromise.
Comply With Your Payment Proposal
After a payment plan has been agreed upon by both parties, the next most important thing is to comply with it. Everything should run smoothly as far as you could follow, however, sometimes it just happens that you couldn’t pay the agreed instalment on time. Maybe you didn’t generate enough sales or income during the period. Don’t worry, tell the debt collection agency what is going on here and ask for an extension, provide evidence to support your request where possible, extensions are considerable if you have a good payment record for the previous instalments. Remember that continuing paying a smaller amount is much better than stopping and paying a bigger instalment later, because continuing paying can demonstrate your genuine intention to pay off the debt, whereas the creditor may take unnecessary further actions if they think you’ve "stopped" payment.
The ultimate goal of debt collection is to recover the debt and resolve the matter, so actively working with the debt collection agency towards this goal would make them less stressed therefore you’ll be less stressed and avoid uncomfortable letters or phone calls.
Here at Xservices, we wish you could quickly pay off all debts and get your business and/or life back on the right track!
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