What to Do When You Receive a Debt Collection Letter or Call
Received a Debt Collection Letter or Call? Here’s What To Do
Financial issues are one of the main causes of stress for people under the age of thirty today.
One of the biggest fears is being pursued by a debt collection agency and this occurs far more than people realize.
It’s even possible to be pursued for a debt that you have already paid off.
This is likely to be a data error but it can still be quite frightening and worse, will even impact your credit rating.
That’s why it’s important to know how to handle this situation.
Should You Automatically Send A Payment?
If it is a small payment, you may think that the best option is to simply cover the cost and move on.
However, this won’t solve the problem of a black mark on your record.
It could also leave the door open for more issues with collectors.
In some cases, a large creditor might have sold off old debt accounts including accounts that were settled leading to contact with people who have already paid their debts.
To deal with a situation like this, you need to make sure that you are aware of the legal limitations and regulations at play.
What Is The Provincial Statute Of Limitation?
Your rights here and indeed the rights of the debt collector are going to depend on the province you live in.
They all have their own rules and regulations that determine how much power they have.
A key point is how much time they have to collect the debt.
Once this period has expired, they have no right to pursue debt collections in most cases although there are exceptions such as government debt and child support.
Be aware that acknowledging the debt can change the limitation period.
If you acknowledge the debt by payment or through writing the period restarts.
This is what a lot of debt collectors are hoping for when they contact you initially.
Particularly if it’s for a debt that was years ago.
Instead of automatically making a payment on the debt, you should ask for a statement of account from the collector.
You should also make it clear that if the account is beyond the limitation period, they should stop making contact with you immediately.
If they continue to pursue you, you can make a formal complaint against the company.
What If You Need To Make Payments?
In some cases, a debt collection agency could be right to pursue the debt that you owe.
In a case like this, you still need to make sure that you are responding the right way.
Be aware that some companies will make an offer to you where you will be able to pay less debt than you owe.
Before you agree to it, you should ask for a record of that offer in writing.
You will then need to decide whether you want to agree to the provided terms.
You should always look at your budget and find out how much debt you can afford to pay.
It is important that paying off this debt doesn’t cause you to fall behind on any other bills that you might need to pay.
You have the power to negotiate other terms too.
For instance, you can speak to the collection agency about how they are going to choose to report the debt to credit bureau companies.
If you pay the debt then this is always going to provide a more positive record.
This is why, even if the company is beyond the limitation period, it can be worth paying off the debt, if you can afford it.
Finally, it is important that you don’t panic when you end up in a situation like this.
You shouldn’t respond too rapidly without first understanding your rights and any consequences of an action that you could take.
You have more power than you know here.
It is up to you to decide how you want to respond and in some cases, you can avoid paying the debt completely.
Get More Support
Are you worried about a debt collection letter that you have received?
Do you need more assistance on knowing how to respond and how to deal with the debts that you have accumulated?
If so, make sure that you contact us today.
We will aim to offer you expert advice and ensure that you know the best way forward.