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Saturday, February 21, 2009

The Debt Collectors Following You

By Paul J. Easton

Secured debts are tied to an asset like a car loan. If you stop making payments in this situation, lenders can repossess your car. This also applies with your home loan. On the other hand; unsecured debts are not tied to an asset, including most credit card debt. Because of this risk, most unsecured debts especially with credit card companies are very aggressive with the debt collection. They even offer free credit counseling to educate clients with their debt repayments.

When having trouble making ends meet, contact your creditors immediately. Tell them the reason for your current hardships and why it is difficult for you to pay your debts. Try to work out with them a modified payment plan. This move will likely reduce your payments to a manageable level. Most lenders, to your surprise, are actually willing to work with you if they think you are acting in good faith and the situation is just temporary.

Never ignore this situation and let your accounts be turned over to a debt collector. With your account in the debt collection list, your creditors have already given up on you and the worst is yet to come.

With debt collection, the Fair Debt Collection Practices Act is the federal law that regulates how and when a debt collector may communicate with you over your financial obligations. As stated in the Act, a debt collector cannot call you before 8 a.m. and after 9 p.m. In instances where you specified before applying for that credit card that your employer doesn't approve of any calls while at work, your debt collector cannot call you too.

Collectors are prohibited from harassing you or using unfair practices when they try reaching you to collect a debt. In addition, they must also honor a written request from you when you wanted them to stop the further calling.

At the end of day, you should always be vigilant for your name not to be blacklisted with the debt collectors. It certainly has its negative impact with your job later, your credit in general, and your reputation Take the responsibility to pay your debts as soon as you can. Debt collectors are just doing their part; fulfill your part as well.

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