Managing your Mounting Debt and Dealing with Third-Party Bill Collectors

In a perfect world there would be no pain or suffering, no divorce, no unemployment. Unfortunately our world is far from perfect and often, bad things happen to hard-working decent people. Whether it's a divorce, illness, or the loss of a job that has left your finances in ruins, you must find a way to cope and to get back on course. In the meantime, you may be receiving harassing calls from third-party bill collectors. Do not despair. Just because you're having a run of bad luck doesn't mean you have to put up with abuse. You do have some options open to you.

Depending on your credit history and present financial situation you may decide to file for bankruptcy. However, there's no point in going bankrupt unless your debt is large and impossible to manage. If your income is relatively steady, you will probably want to pay off your debt. Depending on your own special circumstances, that is probably the best choice to make. In order to enable you to pay your mounting bills, you will probably want to list any assets that can be sold to pay off your creditors and keep your credit rating in good standing.

Another alternative is credit counselling through a reputable debt-consolidation company or otherwise known as a credit counselling service. These companies negotiate on the debtor's behalf and collect a smaller monthly payment that is then distributed to the creditors. As with other options, there are some disadvantages that you'll have to take into consideration. If a creditor reports that an outstanding balance has been renegotiated, this may have a negative impact on your credit rating. And remember to always read the fine print on all documents before signing on the dotted line.

But in the meantime, while you're deciding what to do about your delinquent accounts, what do you do about relentless bill collectors who harass you? First of all, never ever show any fear. Even though bill collectors are not formally trained to be aggressive, relentless, intimidating and rude, they somehow, over time develop most of these characteristics. Remember, your bill collector may be a very nice guy to his friends and neighbours, but once he picks up that phone to demand a payment from you he means business! Below are some helpful tips:

1. Don't let a bill collector intimidate you. He really isn't as smart or as tough as he tries to sound and chances are he makes a lot less money than you do.

2. Understand that third party bill collectors often work on a small salary plus commission. The more they collect the more they earn. Make sure you owe the money and don't be afraid to question the appropriateness of any extra costs.

3. If you truly owe the debt, stay calm, communicate and negotiate. In the eyes of a bill collector, collecting a small amount from you is much better than nothing at all.

4. Check the time limitations on collecting old debts. In most cases, and depending on the country you reside in, a debt that is over 6 years old is legally uncollectable. In the USA specific legal rights and contacts vary from state to state but generally, there are federal laws governing collection agencies.

5. Document the frequency of the calls received and report any harassing or threatening call to the proper authorities.

by: Martha Godman