Many people nowadays are struggling with debt. However, not many of them are completely aware of everything they need to know regarding the type of debt they are carrying, the different financial tools and methods that they can use to repay the money that they owe, as well as how to deal with the original creditor and financial obligations collection agencies. If you are not sure whether the original creditor and an assigned debt collection agency are easier to deal with, you will probably find the following information quite useful.
Dealing with collectors
If you are carrying debt yourself, you are probably well aware of how difficult that can be. Taking care of regular monthly bills is hard enough for most people and when you have to repay a single or multiple financial obligations on top of that, things can get really hard pretty quickly. Now, if this stress is not enough, things get even worse when your financial obligations are being sold to a debt collector agency. Dealing with the original creditor is one thing, having to deal with a collection agency is a different story.
What is the difference between a debt collection agency and the creditor?
Basically, the biggest difference between the two is the way that they approach the debt collection process. Financial obligation collection agencies are known to be very ruthless in their attempts to get what you owe to them. They often tend to not only contact you on a daily basis with harassment calls, but if that is not enough, they start calling your work colleagues, employer, friends, and family. Which makes this financial situation hard not only for you but also for the people around you. When it comes to collecting financial obligations, such collection agencies can really be relentless. It comes as no surprise then that most people prefer to deal with the original creditor. However, in most cases, once a financial obligation has been assigned to a collection company, that financial obligation has been sold. If the collection company, however, has not been sold or is in-house, you may be actually able to negotiate your financial obligations repayment with the original creditor.
What is an in-house collection?
Some loan lending companies use the services of in-house collection companies. These collection companies are usually a subdivision of the original loan lending company. When your account is being collected by a certain entity within the original company or is being collected by such in-house agency, you have the right to have negotiations with the original loan lending company – the original creditor. What you would normally need to do is simply to call the customer service number on your specific account and ask about your financial obligations repayment.
Negotiating with creditors
If you have your account sold to a financial obligations collection agency, but you do not actually owe the financial obligation, it may be a good idea for you to contact the original creditor. When you get in contact with them, you can ask about your most recent bills and any other information that they may be able to provide for you regarding the financial obligations in question. If your financial obligation has not been sold, get in contact with the original creditor and see if the creditor will accept you making a lump sum payment. In the cases where creditors hand over items to financial obligations collection agencies, they usually charge off the account, which basically means that they adjust their books so that they reflect the creditors disbelieve that they will actually get paid. So, it is possible that if you present an offer for a slightly lesser payment amount, they may be willing to consider this option at this point in the repayment process.
What about third-party collections?
In case there are unpaid accounts, loan lending companies normally assign these unpaid accounts to third-party collection companies. These agencies have the sole purpose to recover unpaid financial obligations. If your account has been sold to a collection company, that collection company owns the account, which means you will not be able to negotiate and to ultimately pay the original creditor. However, if the collection company is getting paid per hour or on some other specific terms, there is still a chance that you may be able to directly have negotiations with the original creditor. So what you need to do is to find out whether your financial obligation has been sold or not, you should just contact the collection company and ask them. If your financial obligations have in fact not been sold to the collection agency, just contact the original creditor and negotiate a payment.
Ways to get rid of debt
Whether you are dealing with the original creditor or with a collection agency, you will most likely have to find a way to pay back what you owe. There are a number of different financial methods and tools that are available to those who are struggling with debt, it all depends on the specific types of debt that you are carrying and all the details of your current financial situation. If you are carrying more than a single financial obligation, whether it is credit card debt, medical bills, or some form of personal loans, your best way of dealing with the situation would probably be to consolidate all these financial obligations into a single monthly payment. Of course, debt consolidation is not the only way of dealing with multiple financial obligations. However, it certainly is one of the most used services for paying off a number of financial obligations. It offers some really good benefits which logically makes it a go-to options for those who struggle with the repayment of multiple bills.
What debt consolidation actually is and how it can help you
The most simple explanation of this financial tool is that it is a method for combining multiple financial obligations into just a single monthly bill. That alone can make a big difference to your repayment process and have a huge impact on your whole financial life.
What can consolidating your multiple financial obligations actually help you?
The benefits that this service can give you are definitely not ones to overlook. With a financial obligations consolidation, you can lower the interest rate on your loans, get a reduced monthly payment and as we have already mentioned – to get a single monthly bill instead of your many bills on different accounts. Of course, the terms of your consolidation will normally depend on different factors, with the most important factor probably being the state of your credit score. That is not to say that if you have a poor credit score, you should not consider this financial method, you can still take advantage of most of the benefits that this service has to offer even if you do not have that good of a credit score.
What are the different types of financial obligations consolidation?
You can consolidate your multiple bills in two ways. You can choose to consolidate your loans with a debt management plan or consolidate them with a debt consolidation loan. While the two options work in a similar manner, ultimately trying to achieve the same goals, they also have some big differences. So in case you are considering the option of consolidation, you should get detailed information on what both of these consolidation options can offer you and make your choice based on that.