The term “debt” and “debt collection” is a taboo subject in most businesses. In fact, there are lots of rumors and misinformation revolving from the word “debt collection” all over the internet. That’s why this article is written to put an end to it.
Below are the biggest lies, myths, and misinformation about debt collections.
Myth #1: Debt Collections Won’t Affect Your Credit History and Score if Cleared
Remember, when a debt goes into collection, it’ll automatically reflect in your credit score – regardless of paid or not paid. For example, you refuse to cooperate with Debt Collectors; it’ll only cause more damage in the long run.
So, it is best to clear any of your bills and invoices on time to prevent collections. If ever you fail to do so, a collector will contact you to get an explanation of why a payment hasn’t been cleared. To avoid further issues, explain to the collector why you can’t pay and tell your current situation.
A debt collector is not always about collecting money; they are here to help you live your life debt-free. Most of the time, they will offer a solution that can help you to clear-off your debts in the most convenient way.
Myth #2: Small Debts are Not Counted for Collections
Some agencies will not make an effort to go with smaller amounts. However, other agencies are experts when it comes to small debts as long as it’ll give them good revenue in the long run.
Besides, there is no guarantee that a small debt will not go into collection. Like what was mentioned earlier, some agencies specialize mainly in this kind of field. Remember, any amount of debts can go into collection and can affect your credit score negatively. So, it is always a brainer action to pay what you owe.
Myth #3: Collectors Only Care for Collecting Money
Many people believe that Debt Collectors are all about collecting your unpaid bills and invoices. Like what was mentioned earlier, this is not true. A collector’s main job is to resolve any debts. Meaning, they will do anything to fix any unpaid payments by providing a solution to debtors. They make sure that both debtors and creditors will benefit from that solution.
Debt collectors will go everything they can to give you repayment plans that will suit your current financial situation. They will also offer you some convenient programs to repay your debts and to live a life debt-free.
So when a debt collector contacted you, make sure to cooperate with them and ask what could be the best options they have in hand to help you go through with this.
Myth #4: Collection Agency is Too Expensive
Some business owners believe that hiring a collection agency is too expensive. That’s why most of them collect unpaid payments on their own, which can lead to more significant issues. You can’t collect any debts without proper understanding about law, because anything that you do will be against your action.
Moreover, debtors are wiser nowadays; they won’t hesitate to sue you if you do anything against the law. As you may know, there are lots of laws that are made to protect debtors. So, if you’re not knowledgeable enough with those laws, it is a brainer act to hire a debt collection agency to those tasks for you.