How To Get Your Accounts Out of Collections

Written by: CashAdvice Staff

debt collections

If you fell behind on your bills and your account has gone to collections you might be confused and a bit overwhelmed. With letters and phone calls threatening ominous legal actions you surely want to get these accounts taken care of as soon as possible. First things first though, you need to stay calm and know that you have options on how to keep your accounts in collections from wrecking your credit. Read on to find out the steps to take if your accounts are in collections.

1. Research the Accounts and Creditors

As I said before, when you receive a collections letter you need to stay calm and try to avoid overreacting. Collections agencies want to scare you into acting on emotions and pay your bills right away. Your first step is to verify the information you receive from the collections company. Do a web search for the company name and make sure that the agency is legitimate. Check with the Better Business Bureau as a quick and easy way to see if a company is real and you can even see how other consumers rate their interactions with the company. Next, you want to check to make sure the debt that the collection agency claims you owe is accurate. Many times debts that have been paid already are placed into collections and all it takes is a quick search on your credit report to find out how much has been reported and whether that lines up with your bills.

2. Call the Credit Collections Agency

Once you’ve determined that the debt you owe is both legitimate and accurate and that the collections agency is real you need to contact the collections agency. Your agenda here is to collect as much information about the debt as you can from them so you know what to do next. Ask whom they purchased the debt from, what the original balance was, what the additional fees and charges currently are. Be prepared for them to use pushy tactics to get you to pay the debt right away while you’re on the phone. However, you actually have the upper hand in this situation. Collections agencies buy debt for pennies on the dollar on the hopes they get you to pay the full amount. Don’t pay yet! Ask them to send all the information I mentioned above in writing along with the name of the original account holder, the previous account numbers and the current balance. After you get this information you can work on negotiating a payment plan. Most collections agencies will accept much less than you actually owe so work your hardest to work out a payment plan that works for you and for an amount you can easily pay off.

3. Report Unethical and Illegal Behavior

The Consumer Finance Protection Bureau (CFPB) and other state and federal agencies have rules regarding how often a collections agency can contact you, what hours they can contact you, and what they can say on the phone. Some unscrupulous collections agencies will do everything they can to scare you into paying your debt like saying they’ll report you to the courts or that you are facing jail time and some will even threaten you. Don’t take abuse! If you feel like you’re being treated unfairly call your local police department and ask about them about what to do next. You can also report them to the CFPB which has easy response mechanisms for you to submit complaints right on their website.


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How To Get Your Accounts Out of Collections

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