subject: Payment Defaults Can Be Resolved [print this page] What happens when you don't pay a creditor? That creditor will continue to send you statements to get you to pay, but your balances will be garnished with late payment fees. Each month that you do not pay, your balance will grow with additional interest and late payments. Usually, companies will continue to send statements for about six months hoping that you will make some sort of payment. There are some companies who will wait longer, but six months is usually the norm. Your balance will then be outsourced to a collections agency unless the company has one of their own.
If the creditor has their own collections department, they will send mail and make phone calls trying to get you to pay the balance in full or at least try to make some sort of payment towards the balance. If you make some sort of payment plan and make payments on it, your account will not be sold to an outside collections agency. Payday loan companies that have their own collections departments and will work with you to set up a payoff schedule so your account does not have to go to hard collections.
What does a collection's agency do with an acquired balance? An agency will purchase your balance for pennies on the dollar amount you owe. You will now be in hard collections.They will take over the mailing and calling in order to try to get you to pay. Many of these collections agencies will be relentless with their attempts to get some money out of you. They may cut a deal and lower the amount that you have to pay in full, but the phone calls and letters will continue to come at you. Your balance could be sold to multiple collections agencies. In the mean time, you will grow tired of their relentless efforts to contact you at home, work and towards family.
How do I stop it? The easiest way to stop hard collectors from calling is to pay on your debt. They will usually offer you savings if you pay in one lump sum, or schedule the payoff over a few payments with a bit less of savings on the total balance owed. They will let you make small payments over a long period of time, but you will probably not be saving any money off the balance owed.
You can try to stop some of the harassing phone calls. If they are calling you at work, you will need to tell them that they do not have permission to call you at work as it is putting your job in jeopardy. They will have to stop calling there or you can press charges against them. Consumers do have rights and if you feel that a collector is harassing you, you might want to think about contacting a lawyer.
Can I get it taken off my credit report? In order to remove an entry from your credit report, you must write a dispute letter to all three major bureaus. In this letter you will want to address the problem you are disputing and the reasons why. The credit bureaus will do their own investigation from there. The credit bureaus have thirty days to investigate and make any changes. They will notify you by letter of their findings as well as any action taken by them.
by: Malinda Starner
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