What Could Happen If You Don't Pay a Credit Collection Service?
Failure to pay your loan, credit card bill, or even your monthly internet costs will most likely result in your account being forwarded to a credit collection service. If you’re thinking not to pay off a collection, consider these consequences of ditching your outstanding balance.
It will have an impact on your credit and almost certainly, it will happen as soon as the collection is listed on your credit report. This will result in a drop in your credit score if it hadn’t already, which commonly happens when the collection is on a credit card or loan. By the time the collection occurs, late payments and the succeeding charge-off that normally precede a collection account should have negatively affected your credit score.
Expect constant calls from Collectors.
Their job is to persuade you to pay for your debt. Usually, collectors don’t get paid until they collect from you. Therefore, you can anticipate receiving both phone calls and letters from debt collectors unless you pay up as soon as possible.
Luckily, you may stop debt collector calls by writing them a letter and asking them to stop. But you still have to be careful as several debt collectors ignore the law and will still be persistent in calling. Furthermore, if another collector takes over the same debt, your previous cease and desist letter will not apply.
You may be denied of your applications.
Debt collections are a grave offense and an indication to other lenders and creditors that you haven’t always been diligent in keeping your payment promises. As a result, you’re assumed of as a riskier debtor and may lead to your applications for new credit be turned down.
If you do get approved, you may end up paying higher interest rates.
Because some applications do get approved despite having the collection on their credit report, once you’re approved, the creditor may require you to pay a higher interest rate in order to balance out the heightened risk of nonpayment.
You could experience difficulty getting a job.
It makes sense that lenders and creditors would make you pay in other ways when you have a collection account. Sadly, several employers check credit reports on potential employees and having a collection on your credit report may hold you back from getting the job. This typically happens with higher management-level and financial jobs.
Uncollected debt gets passed around different collectors.
Collection agencies are normally assigned a debt only for a few months. If you fail to pay during that time, a new collection agency will take over. This process is repeated a few times through the years or until you finally pay up. This means that you would have to send another cease and desist letter to discontinue the calls or mail a new debt validation letter just to ask the collector to prove you owe the debt.
You can be sued.
A lot of people brush off the idea of getting sued, thinking that collectors won’t pursue a case for debts over a certain amount. The truth is, collectors could sue you for any amount of debt. If the creditors get a verdict against you, they may also request the court to garnish your wages as a way of enforcing the judgment. It is highly suggested that you do not disregard lawsuit summons, although you believe that your debt is past the statute of limitations.
It takes seven years for the dept to fall off your credit. The debt stays on your credit report the entire credit reporting time limit, whether you pay up or not. After which, the collection falls off your credit. However, the collector could still come after you as you still owe the debt. The good thing is it won’t show on your credit report anymore.
Paying a collection is oftentimes hard, but there are certain benefits to paying, like getting the collectors off your back.
What Can You Do When A Credit Collection Service Calls You?
Debt collectors are notorious for calling debtors regularly, and may even catch you off guard occasionally. When they happen to call you when you’re unprepared, you may probably end up making arrangements to pay a collection you can not afford. Either that or you will find yourself in the middle of a fiery argument with a collector who’s not willing to stand back until you agree to pay up.
Here are some great tips on handling a credit collection service’s call:
Make sure you have enough time to talk.
If they caught you at a busy time when you can’t even take down the collector’s information, ask them to call back at a more convenient time for you. Although you wish for the debt collector to just stop calling for good, you do need to get their name and address to be able to mail a cease and desist letter.
Secure a pen and paper.
The collector will surely take down notes of what went down on your phone call. You should, too. Those notes will come in handy if you ever face a collector in court. Make sure to write down the date and time of the phone call, the collector’s name, and the name and address of the collection agency he’s calling from, the alleged amount of your debt, name of the original creditor, and others you feel are essential to write down during the phone call.
Don't declare the debt.
One way to think about it is that you’re innocent until proven guilty. At least do not admit to the debt nor arrange a payment until you have verified that the debt is yours and that the collector you are speaking with is authorized to collect on it. Oftentimes, debt collectors can either make up debts or collect on those that are past the statute of limitations. Make sure to verify through debt validation process.
Request some information about the debt from the collector.
To verify the debt and that the collector is authorized, ask for some information to be sent to you. It’s okay to give your address so they can send you the bill for the amount you owe.
Don't discuss your income, debts, or other bills.
Even though they may get those information by looking at your credit report, remember that anything you say during the phone call may be used to collect the debt. Avoid the discussion, especially if you’re not ready to pay.
If necessary, hang up.
Make sure you have enough time to confirm with the credit collection service that the debt is yours and therefore decide whether you can afford to pay or not. Otherwise, keep the conversation short.
There are a few things you can do after you get off the phone: first is to verify the debt using the debt validation process, then you can send a cease and desist letter, or ask for a pay for delete. You may also offer an agreement for settlement or pay the debt once and for all. You may also ignore the debt, but be prepared to face the consequences, especially if your debt is still within the credit reporting time limits and the statute of limitations.