The Collection Agencies Support Center

Every person is unique, but when you face a challenge like being contacted by a collection agency, you are never alone.  Countless men and women have faced the exact same challenge and have survived and thrived. The following guide is designed to help you navigate your journey with the best information and resources that helped other survivors when they faced the same challenge.  

TSC has scoured the Internet and assembled links to the very best resources about collection agencies: articles, blogs, forums and tools that can help you make better decisions and take action to overcome the range of physical, emotional and other challenges that you face.

As you’ll see, we always welcome your ideas and suggestions to make this Dealing with Collection Agencies Guide even more helpful to survivors like you.    

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Survivors Say: Best Resources when you are contacted by Collection Agencies

• Federal Trade Commission: Debt Collection Facts
• Federal Trade Commission: The Credit Practices Rule
• Federal Trade Commission: Credit and Your Consumer Rights

The Big Picture

No matter what your financial situation, you may be contacted by a collection agency. A collection agency is a third party hired by a creditor to collect an unpaid debt. They are compensated by either a flat fee, a percentage of the collected amount, or may have bought the debt – called a charge off – from the original creditor. Most debts are not turned over to collection agencies unless attempts to collect payment by the original creditor have been unsuccessful and after the account has been behind three to six months. A legitimate collection agency will send you a written notice with all of the terms included upon request.

If you have been contacted by a collection agency, it is important to remain calm and request a written notice of the debt and information about the initial creditor. It is then possible to determine if the request for payment is or is not legitimate. Answering this question is the first step to most effectively and efficiently dealing with the collection agency.

To learn more and begin the process of dealing with a collection successfully, visit:

Card Report: Credit Tools, News, & Reference

Your Collection Agency Experience

To better understand your options for dealing with a collection agency, it is important to know whether or not its request for payment is legitimate before proceeding. If you are not responsible for the original debt, let the agency know in writing that you are not responsible for the debt and consider the possibility that you may be dealing with a case of identity theft. Contact the original creditor for resolution. Reference The Survivor’s Club Money Support Center under scams and ripoffs for more information on identity theft.

If you are responsible for the debt, the next step is to contact the original creditor to see if they have sent your account to the collection agency that contacted you. It is also a good time to ask if the creditor will “recall” the debt if you are able to negotiate a resolution and plan for payment. If they agree, you are on your way to surviving your experience with a collection agency.

If your debt has been turned over to collections by the original creditor and no resolution can be negotiated, you will most likely need to deal with the collection agency to protect your credit and handle the unpaid debt. To get advice, visit:

Nolo: Dealing with Collection Agencies FAQ

Your World

Chances are, if you have one unpaid debt in collections, you are experiencing financial hardship and are in need of credit help or counseling. You may have been contacted by numerous collection agencies which can be frustrating, especially if you can’t see the light at the end of the tunnel. Help is available.

• Credit Counseling 4 You
• Nova Debt: Credit Counseling and Debt Management Services

Some collection agencies use unfair tactics, harassment and lies to collect unpaid debt. The Fair Debt Collection Practices Act outlines your rights when dealing with collection agencies.

Fair Debt Collection Practices Act

Collection Agency Myths

• Medical accounts placed in collection cannot be reported to the credit file. This is a common misconception. Collection agencies have always been allowed to put medical accounts on consumer credit files.
• Collectors continually hassle people who cannot pay.
• I can tell a creditor not to call me about a debt and they may not contact me further.

Information and Recommended Links for Survivors

• Associated Content: Debt Collection - Dealing with a Collection Agency
  
• Nova Debt: Collection Agency [PDF]
• Privacy Rights: Debt Collection Practices - When Hardball Tactics Go Too Far 
• MSNBC: How To Negotiate With Your Creditors
  

Types of Assistance

Credit Counseling

A single contact by a collection agency may not reflect your current financial situation or indebtedness, but repeated calls and worry about paying your monthly bills may be an indication that you need debt and credit counseling. Professional credit counselors can offer solutions to your current financial problems, educate and advise you on money management, and help you develop a plan for your financial future.

NFCC: Credit Counseling

For tips on choosing a credit counselor, visit:

• BBB: Tips on Choosing a Credit Counseling Agency
  
• MSN Money: The Consumer's Guide to Credit Counseling
  

Debt Consolidation

Debt consolidation is the replacement of multiple loans with a single loan and is sometimes a worthwhile and prudent option for those in a credit crunch. For more information on choosing the right consolidation loan, visit:

MSN Money: Your 3 Worst Consolidation Moves

This debt payment calculator is handy for deciding if a consolidation loan is appropriate for you.

MSN Money: Should You Consolidate Your Debt?

Education

There are numerous articles and resources on the web for educating yourself on debt and money management that are useful when dealing with collection agencies and your personal debt.

• NFCC: Credit Counseling
  
• Federal Trade Commission: For People on Debt Management Plans - A Must-Do List 
  

Creating a support circle

• Set up your TSC Survivor Profile
• Join support groups of other survivors or set up your own
• Interact and provide updates on your profile or our forums

Work Matters

If you are out of work and having difficulty obtaining employment resulting in unpaid bills, there may be resources available to compensate you or to help you find a job to help you conquer your debt.

Almanac of Policy Issues: Unemployment Compensation

The Emotional Roller-coaster

Surviving after a collection agency experience proves to be a challenge to nearly everyone. Some people find that dealing with a collection agency is more of a hardship emotionally then the actual aspects of their financial situation. Many survivors panic and break down under the stress. To avoid this, it's important to continue living your life normally, participating in the same daily activities you've always done. Support groups are also important to maintaining a healthy emotional state. Other than that, educating yourself and exposing yourself to books and stories written by those who have dealt with collection agencies in their past can help give you and your loved ones hope while dealing with this crisis.

Books Survivors Recommend

• The Complete Book of Dirty Little Secrets: Money-Saving Strategies the Credit Bureaus Won’t Tell You
• Rich,The Guerrilla Guide to Credit Repair: How to Find Out What’s Wrong with Your Credit Rating and How to Fix It
  
• Surviving Financial Disasters, Foreclosures, Eviction, Auto Repossession, Excessive Debt and Much More   
  

What Survivors Wish They’d Known

Communicating with Your Credit Counselors

• Have a friend or family member with you while visiting credit counselors or lending agents not only to provide support but to lend an extra ear to understand everything your provider has to say and to think up any more questions you may not realize are important at the time.
• Don't be afraid to ask any questions you feel you need the answer to, even if you may be scared of the answer. Ignorance won't help you fight this challenge - emotionally or physically.
• Write down any questions you may have ahead of time and the answers to those questions as they are provided.  Don't be afraid to ask for clarification on anything.
  

Dealing with A Collection Agency: Information and Recommended Links for Co-Survivors            

How you can help

• Assist your friend or family member with their day-to-day duties or chores, but be sure to find a good balance so as not to throw off their pattern of living, which may increase their stress as they may feel they are becoming a burden.
  
• Preserve your friend or family member's daily activities. It's normal to feel protective but excluding patients from activities or decisions you don't see them as fit enough to do or make contributes to feelings of helplessness.
• Involve your friend or family member with others. Don't focus exclusively on their financial situation when interacting with them. Talk to them about yourself or make plans to visit friends and loved ones. A survivor involved with others has a better chance of avoiding feelings of abandonment.
  

What to say    

• "I will support your decision in whichever course of action you choose."
• "I heard about…from…Do you want to talk about it?"
• Tell them how much you care about them

What not to say

• "Don't worry, we'll find a way to make this all go away"
• "You won't have to lift a finger"
• "Your credit will be ruined forever"
  

Things you can do for a survivor every day

Offering day-to-day support is a great gift to give a family member dealing with a collection agency or a friend/neighbor that is facing the same challenge. If the survivor isn't a family member, help out the individual's family when they are away by picking up the mail or newspaper, making meals, going grocery shopping, etc. If the survivor is a family member, help out with chores or other duties they may have fallen behind on.

How to build a support network

• Set up your TSC Co-Survivor Profile
• Create a support group for your friend or family member.
• Interact and provide updates

After recovery, assess and share with others how you feel emotionally, mentally and spiritually. Recovering from a financial setback like this is almost as shocking as receiving the first collections call for some people. By telling your story, you can not only put into perspective your thoughts and feelings but you can provide hope to others who are going through a similar journey themselves.   

Recovery

Emotionally dealing with financial recovery may be difficult in that there is still much to do and the uncertainty of whether you are completely past the crisis or may have difficulties in the future can leave you feeling unprotected. Check out this site to create a plan for your future financial freedom.

Chelsea Green: Your New Year's Resolution - Be Debt Free by 2010!

For an incredible story of debt survivors and the feelings they experienced during their journey and after recovery, take a look at

Smart Money: Surviving Debt   

Give back

What helped you while you were dealing with a collection agency and realized you had recovered? Take a look back at your journey and share with other what helped you and what you wished you would have known/done during your collection agency experience. You can create a profile, reach out to other survivors, join support circles or share your story by following the links at TheSurvivorsClub.org.

What can you do when you find out your experience with a collection agency was unsuccessful and that you are being sued for the debt and may be forced into bankruptcy? Many survivors refuse to cope with the possibility of bankruptcy, but by ignoring this possibility when their debt is out of control ,many people and families find they are unprepared when the worst-case happens. If you find out that your negotiation was not successful, it's important to understand how to deal with the consequences. Reference The Survivor’s Club Money Support Center under bankruptcy for more information on bankruptcy.