How To Overcome Your Debt Collection

Debt collection is a legal business, and it is not that debt collectors always use abusive language to start the collection process. Many debt collection agencies are reputed and use honest people to collect the borrowed money. They are just doing their jobs and will settle things as soon as possible. There are lots of crooked borrowers who take money from creditors and do not repay it.

Many companies suffer because of outstanding debts that can put companies into difficult situations, creating problem in cash flows and lead into financial snags. It is not just the problem of companies but individuals are also facing this problem of debt collection. According to researches more than a third Americans has taken services of collection agencies. The negotiation and repayment strategies are complex but it can be easily implemented if you know it well.

Plenty of Americans are struggling from their personal finances. More than 35% Americans have debts that are reported to debt collection agencies. Many people being dunned for negligent of credit card, hospital and several other bills, and it is obvious that they will be intimidated by collection agencies. Rather than getting into panic calls, it is better to understand the negotiation process and implement strategies to find a way out.

How debt collection agencies work

Debt collectors work for debt collection agencies, though some work on their own, and some are lawyers who work with clients to recover delinquent debts. Most of the agencies start working on the process after 60 days past due of debt, and collect money and remit them to the creditor. Debt collection agencies work on contingency basis, meaning if the collection agency fails to collect the money, there is no fee earned. They work on various debts, chiefly credit card debt, medical debt, automobile loan debt, personal loan and even cell phone bills.

  • Generally collection agencies are now specialized in types of debts. For example, an agency is only specialized in collecting debts of at least $400 that are less than a year old. A skilled debt collection agency will also bind its effort to collecting debts that are within the statute of limitations, which differs by state.
  • Debt collectors use variety of techniques to recover debt from borrowers. It depends on agencies but the general methodology is same.
  • Collectors work for agencies use first mails and phone calls to contact delinquent borrowers, and ask them to repay the debt as soon as possible.
  • In many cases collectors can’t reach the borrowers possibly because of the debtors do not want to. In such cases, debt collectors search personal information through computer software and private investigators. They also look for debtors private assets and evaluate the capability of borrowers to repay.
  • Debt collectors have this bad reputation of for harassing clients. However, good and reputed collection agencies work in a different fashion as that they won’t violate consumer protection law. Good debt collectors will try to gather exact and comprehensive records so that they don’t chase wrong people. They also respect the statute of limitations and won’t sue clients for debts. They don’t threaten or harass you or pass any derogatory statement to provoke you.

How to deal with debt collectors

If you are a debtor and repeatedly called by a debt collector to repayment, you can implement certain strategies to gain an upper hand in negotiations. Most crooked debt collectors make sure they fetch money more than you are required to pay.

Keep aside your emotional side

Many times debt collectors call to assess your ability to repay the amount. It is best to make things short and follow the rule of law. A reputable debt collection agency will always send you a written notice before they contact you initially, so if it is not happened, don’t encourage the collector.

Make sure debt is yours

Be clear with your credit report, loan reports and other documentation. Many times incorrect data has created this terrible mistake of wrongfully accuse of debts that wasn’t actually yours.

Wanting proof

If you find there is an identity theft, send a mail to the debt collector and tell why you will not pay. Also, mail to credit bureaus by mail, telling them the mistake testified by valid documentation. If you are not sure of the debt, ask the debt collector to verify the debt by authentic documentation.


If you are a genuine debtor and it is extremely difficult to pay the whole amount at once, negotiate with the collector how much you can afford to pay and whether it would be the final settlement. If they agree with the terms, obtain a confirmation document before you pay.

Jag Cruse is a reputed lawyer working as an independent counsellor for last 20 years in Houston. He has been working for many debt collection agencies and gives consultations on debt collection and legal implications. He has also written articles how a reputed debt collection agency work and nuances of debt collections.