You’ve done your best to stay current on your obligations. But, for whatever reason, you just can’t maintain your payment obligations. Eventually, some or several of your obligations go into default. Some of your creditors hired collection agencies to collect defaulted debts. And despite what you may have heard from the Internet know-it-alls, here’s why you shouldn’t avoid calls from collection agencies.
I’m sorry but not answering your phone when a debt collector calls isn’t a smart strategy, and do you want to know why? Your phone numbers have been programmed into their auto dialer system and it’s just going to keep calling you until you do answer.
If you don’t want the collector to contact you any longer all you have to do is tell them so. They have to comply with your request. That will save you the hassle of running from your collectors.
However, despite not receiving any more phone calls that certainly doesn’t mean the collection process has to stop. And, in fact, if you choose to ignore their calls they may have to resort to more aggressive collection tactics, which may include some that you won’t appreciate any more than their phone calls.
If you don’t know what a process server is, that’s probably a good thing. A process server is the person who is hired to deliver a copy of the complaint when you get sued. This person is going to know where you live and where you work. You won’t be able to ignore them.
So, if you ignore you collectors long enough you don’t really leave them with many options other than to sue you. If you get sued, you have 30 days to respond. If you continue to ignore the collection process the debt collector or original creditor will win by default. They have now become your judgment creditor. Things are about to get worse because this is when they can start the legal process of garnishing your wages.
If you don’t ignore the debt collector when they first start contacting you, you may be able to set up a payment plan or settle the debt outright and avoid credit reporting. Of course, if you don’t talk to them you’ll never know whether or not this is an option. By the time they’ve furnished the collection account to the credit reporting agencies, your options become considerably more limited. If fact, you may have to live with the collection for several more years even if you pay or settle the debt.
Debt collectors, as in the actual collection agents, almost always earn more money if they’re able to collect more debts from defaulted debtors. Collecting debts is a little like being a salesperson. The more you sell, the more you make. As such, collectors are almost always willing to work with debtors to come up with deals to exhaust defaulted debts.
These deals are formally referred to as settlements. An example of a settlement would be this;
You owe $5,000 for a defaulted apartment lease. The property management company has hired a collection agency to collect that $5,000 from you. Obviously, the debt collector would love to collect every penny of that amount because the collection agency and the collection agent will make a handsome commission. However, all collection agencies have an incentive to collect some portion of that $5,000 or they won’t get any commission.
So, when you answer the collector’s call you can ask them if they’d be willing to take less than the full $5,000 and consider the balance to be zero. This is you signaling a willingness to work with the debt collection to resolve the debt.
The collector will almost certainly have been given some leeway to work with you to settle the debt for some amount less than $5,000. Let’s say, hypothetically, that amount is $3,500. You’ve just gotten a $1,500 discount on a debt that you actually owe, and the collector is about to collect $3,500, which means everyone wins.
In sum, ignoring collector calls might get you sued and won’t stop the calls. And, you may have missed out on an opportunity to avoid negative credit reporting or settle the debt with a sweet deal. Of course, you would never know any of these things unless you actually answer the debt collector’s call. So, stop avoiding their calls.