What to do when you receive a collection notice.

Collection Companies are annoying to the consumer and necessary for the companies they represent. If you owe a debt, you are obligated to pay it, unless, of course there are good reasons such as contracts not met, inferior product, unauthorized charges etc. With so many people now laid-off, taking pay cuts and fighting for paychecks from hurting employers, the "past due' situation has gotten much worse. Over 60% of consumers have experienced a collection notice at one time or another in their lives. Sometimes through no fault of their own.

If you should receive a collection notice from a collection agency:

1) Make sure you know who the collection agency is representing. Many times you will receive a notice from the agency itself as though you owe them a debt and no mention of who they are representing.

2) Immediately write a challenge letter asking them for proof that this debt is accurate.
A collection agency, upon first notice must allow you up to 30 days to challenge the debt before they can attach this information to your credit report. ALWAYS make use of that time by challenging your debt whether or not it looks valid. You can buy yourself extra time to pay the debt before it goes on your credit record by asking the collection agency to go back to the creditor and get the information you asked for. Many times it will take that original company over 30 days to get back to their collection agency. You've just bought your self possibly over 60 days that may be helpful for you to accumulate enough money to pay the debt and save your credit.

3) BEFORE you pay your obligation make a phone call to the original creditor. Tell them you do not work with debt collectors and that you will be sending them the check directly IF they can guarantee to you that this will not be recorded on your credit record.

4) If you are forced to pay the collection agency make sure they do NOT record this on your credit record. If they tell you they will report this debt as being paid tell them that is not good enough. What they mean is that they will report the debt as a collection and show that it was paid. This does NOTHING positive to your credit score. You want this removed completely if you pay this debt in full.

I'm in debt up to my eye balls....now what?

In the next few weeks I am going to report on the infamous Debt Consolidation and Debt Management programs that you hear advertised on TV, radio, mail and through the internet.

Listen, at a time in our economy when unemployment is high, debt is out of control and foreclosures, bankruptcies and repossessions are happening on almost every other block from you, the stress everyone feels is sometimes desperate and enormous. If I can give no other comfort than information I would strongly suggest to stay calm as we all weather these financial storms and stresses. Along with staying calm, become informed and organized.

In the next few weeks I am going to examine, by personal contact, the various programs that are being offered. I will ask questions that maybe you have not thought of asking and providing you with real information you must take and evaluate to your own situation. I guarantee some of you will decide you can do these things on your own, some of you may really need the service and still others will find that it will not be of any value to your situation. Just remember you can’t make informed decisions unless you have all the information and sometimes we get so mired in the hopelessness and stresses of our financial situation that we don’t always think clearly. I’m here to do that for you.