It’s anything but a good feeling.
Whether you’ve made a single mistake or it’s symptomatic of deeper financial hardship, getting a call from a collection agency can be distressing and worrisome.
I started my career as a collector, and have initiated thousands of such calls. I know from experience that most debtors are good people just trying to make ends meet. Our job is not to cause you further grief, but rather to problem-solve and help find ways to honour your financial commitments.
So, when the debt collector calls, what should you do?
First and foremost, don’t go into hiding. Doing so will only make the situation worse. Communication is key. Step up and take (or return) the call.
Credit bureaus like Equifax and Transunion take debt reported by collection agencies very seriously, and until yours is paid in full, you will have trouble getting any kind of loan or financing. That means you may not be able to lease a car, get a mortgage, or secure a line of credit – and almost certainly not at a good rate.
So in order to get on with the life you deserve, you’ll need to get the debt cleared up and enable your credit rating to begin recovering. Only once you’ve paid the debt in full will the collection agency update your file with the credit bureaus, and the seven-year countdown to absolution can begin. That IS a long time, and all the more reason you don’t want to push it forward a day more than necessary.
Communication is key to resolving the situation.
Often people think they lack the means to settle their collection agency debt, but that is seldom the case. Doing so requires creativity, discipline, and effort. As with other important life challenges, you’ll likely need to exit your comfort zone. And you’ll probably find yourself making a few important, worthwhile changes.
Many collection agencies accept payment in multiple ways. At MetCredit we accept credit cards, and debit cards, as well as payments via online banking and wire transfer.
Here are a few places debtors can find money and end collection agency calls:
• Income tax returns
• Loans from family and friends
• Having a parent or relative co-sign a loan
• Alternative lenders
• Payday loans
• Specialty lenders
• Alternative mortgage providers
See our Help Paying Debt page for direct links and telephone numbers for specialty lenders and mortgage providers. For further help and to develop and implement a strategic plan to eliminate debt, seek out a not-for-profit credit counselling service.
If you’re owed money by others, download my Debt Collection Tipsheet below for 10 pro tips to help get you paid quickly.
Remember, debt should be a temporary setback. Take action to get the assistance you need to put debt where it belongs: in your past.