If you find yourself buried under a mountain of debt which you cannot afford then it is highly likely that one of your localis going to be getting in touch with you. For some reason however, over the years these companies have gained something of a scary reputation amongst debtors and we often find that their communication such as calls and letters get ignored. This is of course the worst thing that you could possibly do and today we are going to get into exactly why.
These companies actually create a win-win solution and they play an important role in the world of debt. What happens with these companies is that when someone owes money to a bank for example and they don’t pay, the bank have two choices, they can either invest time, resources and money into chasing up the person who owes money, or they can sell the debt on for a discount. The debt collection agency will look to pick up a debt, at a discount, and then they will use their resources to fully dedicate themselves to getting that debt repaid. That is where they offer a win for the bank or for the lender, and this is where they can offer a win for the person who owes the money in the first place.
Passing on the Saving
Debt collection agencies perfectly understand that the person who owes money is not sitting on a mattress full of cash that they can use to settle the debt. For this reason they will look to pass on some of the saving which they made in purchasing the debt. Now in some cases this may look like a heavily discounted lump sum payment, in others it may be a simple freezing of the interest so that the debtor can once again start to get their payments back on track. Ultimately thewant their money back, and they will always get that money back by some means, the easiest of course is that it is paid for on a monthly basis.
Burying Head in the Sand
The notion that ignoring communications from a debt collection agency will help the problem is of course ludicrous, all that it will do is to lengthen the process by which the money is repaid. There are processes in place here with regards to how many letters and phone calls are made, and once those have been consistently ignored they will go down more extreme routes which will have a lasting impact on the person who owes money.
More Extreme Methods
Debt collection companies have a false reputation that they are like loan sharks who will come and take your possessions if you fail to pay. The reason that this reputation exists is that yes, in some extreme cases they may repossess vehicles or even properties if the person who borrowed money for them reneged on their contract and then refused to act when they were sent letters and phone calls. Believe it or not a debt collection company does not want to take these kind of measures and they are very much the most extreme thing that they will do, having exhausted all possibilities beforehand. In order for this to take place they also need permission for a judge, and you can only imagine the paperwork and the time which the company must put together in order to get before a judge for them to give permission for a repossession.
Lasting Damage for the Debtor
If a person simply owes money from a cash loan, rather than any lending which may have been done in order to buy something or a hire purchase agreement. What can happen in this case, if they don’t pay anything back after repeated attempts to get in contact, is that you will end up with a black mark against your name for life. Right now is may not seem the most important thing but being able to borrow money is a very key part of living life and there are many occasions which will call for you to borrow some money and you will not be able to do it. A judge does have the power to wipe off the debt but that will have long-lasting ramifications for the debtor and it will certainly mean that they have a destroyed credit rating and anything which they own that has not yet been fully paid for will be taken from them.
The Final Opportunity
What many fail to realize about these companies is that they are in fact offering an opportunity to get the debt sorted out once and for all. What so many who do owe money fail to recognize is that all parties involved want the debt sorted as quickly and as easily as possible. The debt collection agency is not looking at spending all of their time chasing up people who owe money, it was for that reason that the original lender was happy to sell on the loan or debt in the first place. Every effort will be made by the debt collectors to allow the person owing money to set things right. These agencies will try to speak with the debtor, understand their true financial situation and then look to find ways in which they can support them in prepaying their debt. This however is the last opportunity which will be given to whoever owes money and that is again why it will be so important that anyone who does owe money and who has broken the contract with the original lenders, are ready to speak when a debt collection company communicates with them.
Ultimately there is absolutely no reason to ignore the communication which you may receive from one of these companies, in doing so you are not helping yourself at all and in reality the situation is getting worse with every letter or call which goes unanswered.