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| Debt Disaster Relief E-Book |
| The Collections Process |
| With regards to collection calls, if you do not want these you can ask about how to request a �cease and desist� to stop the calls.
Another point when dealing with collections is that you might be able to negotiate with the collections representative. For example, if you �bring your account current� will they waive any of the fees assessed to your account (late fees, over the credit limit fees)? When your account is in collections it will look something like this: Bucket 1: 1 to 30 days past due Bucket 2: 31 to 60 days past due Bucket 3: 61 to 90 days past due Bucket 4: 91 to 120 days past due Bucket 5: 121 to 150 days past due As you start missing payments or making partial payment (something less than the required minimum payment), your account will be tracked with an amount for each bucket that is relative to the payments missed. You might see: Bucket 1: $65 Bucket 2: $45 Bucket 3: $10 The term �Bucket� is how the Collections Department categorizes how late your account is. It would be considered an in-house term and the collections representative will most likely refer to your account as say 60 days past due as opposed to saying Bucket 2. When you receive a call, the collections representative will be asking for payment for the total amount due, the amount that will bring your account current. The phrase �bring your account current� is something commonly heard when your account is behind. It specifically refers to a payment that includes all of your past due amount plus your current payment amount (which may not be due yet). When you only have a limited amount of money you can pay you need to ask the collections representative to break down your payments for you. The most important part to pay is the amount sitting in the bottom bucket or the oldest payment due. In the above example, the amount would be $10. Sending in good faith payments of say only $5 to each credit card company really doesn�t do any good. Know what is in each bucket and make payments accordingly. This would also tie directly into what is being reported to the credit bureau companies as far as late payments are concerned. Each credit card company has different points in which they report late payments. Some companies may not report your account late until you go over 61 days. Some report at 30 days past due. The Collections Department will have a variety of different types of payment arrangements they can offer you. Be sure you know how much you can really afford to pay and try your very best to stick with the payment plan. Some companies will even lower your interest rate while you are on their payment arrangement. If you break an agreed upon payment arrangement the company will be less willing to work with you in the future. Once you miss too many payments, you will fill up all of the buckets and your account will then �charge off.� This means that the credit card company will turn it over to an actual collection agency who will be much more aggressive at collecting the balance. |