How to handle collection agencies
If you fall behind on your debt payments then naturally your creditors have every right to contact you to try and recover the amount which you owe to them. Your creditors are the institution which advanced lending to you, such as your credit card provider or the issuer of a loan. Often when accounts fall into default the creditors may issue a default notice which states you are now liable for the full amount of the debt as are in breach of the terms and conditions. At this stage your debt can be outsourced to a third party collections agent.
This may not happen immediately. At some point, if you do have a debt which remains in default and you have not attempted to sort it out with the creditor, you should expect to hear from a debt collection agency. However they must contact you before the statute of limitations on your debt has expired. In some instances people can be contacted by agencies without being aware that the creditor has either assigned or sold the debt on to a third party. Thus the important thing to establish if a debt collection agency does contact you is if they have the authority to collect the debt.
It makes far more sense to deal with a debt collection agency in writing than by telephone so you should request that all communications from the agency be in writing. You should request proof that the debt now belongs to the agency and that you now owe the debt to them rather than your original creditor. In order to establish this you should request that the agency provide you with a copy of the original loan agreement or credit application, with a statement breakdown showing any charges which have been added to the original debt.
A legitimate third party debt collection agency should be able to furnish the agreement as requested within 30 days. However if they cannot verify the debt then they cannot attempt to collect the debt from you or contact you regarding it. It could well be that the agency has purchased your debt for a few cents on the dollar and if they do verify they have the right to collect it, it may be possible to negotiate a payment arrangement for less than the full outstanding amount, as your creditor has already sold it for less than its book value. However if you do negotiate such an arrangement be sure to obtain a written agreement that the debt will end there and not be sold on again to another agency.
If you are aware that the debt is yours then you should be willing to deal with the agency and sort it out. However dealing with them in writing is the wisest option if you do not want to deal with them by verbal communication which some people may find stressful.
If you are un-cooperative with a third party agent they have every right to chase up your debt with a court judgement so it is best to deal with them providing they are not in breach of the Fair Debt Collection Practices Act. There is no reason why you should not be able to deal with a collections agency in a reasonable way if you follow these guidelines.