How to deal with Collection Agencies

If you are behind on your bills, you know what it's like to get a call from a collection agent, also known as bill collectors.

Collection agencies have one simple task: collect money. In many cases they are paid a commission on the money they collect; the more they collect, the more they get paid. Since they may not get paid if they don't collect, they will try "every trick in the book" to separate you from your money.

Common collection agency tactics include calling you repeatedly at home and at work. They may even call friends, family, co-workers, or neighbors. They will send letters, and threaten you with negative information on your credit report, or legal action.

How can I stop collection agents from calling?

The most obvious way to stop a collection agent from calling is to pay them. They are calling for money; once they get their money, they will stop calling. If you owe the money and can pay, pay them.

If you don't have the cash to pay them immediately, consider getting a debt consolidation loan to repay them. If you don't qualify on your own, the bank may accept a co-signer.

Your next option for dealing with collection agents is to work out a repayment plan. If you owe $1,000, you could offer to pay them $200 per month for the next five months. The collection agent would prefer to get all of the money today, so they can earn their entire commission today, but if that's not possible they may accept payments over time.

Before you make a deal to pay over time, review your personal budget so you know what you can offer, and don't offer more than you can afford.

If you can't afford to pay them, the final alternatives to stop them from calling are, credit counseling, Chapter 13 Wage Earner Plans, consumer proposals, and, if all else fails, personal bankruptcy.

Debt problems won't get better on their own, so if collection agencies are calling you, either go bankrupt or pick one of the bankruptcy alternatives discussed above, and get started.