How to Avoid Debt Mistakes
Hello, this is Lev Selecter with 101creditrepair.com, and the topic of today’s video is Major Mistakes People Do When Dealing With Debt Collectors. The first major mistake is trying to hide from collectors, this is a very bad idea. With today’s computer systems, they will never lose you, in fact they’ll locate you very fast and very easily and the citation will only become worst. So don’t try to hide, keep in touch with debt collectors. Talk to them, negotiate with them. Next major mistake is not keeping track of everything which going on with your account. You have to get organize, you have to keep record of the older conversations, all the agreements, all the bills, all letters, everything. And make some sort of file system and get organized and keep it in file for a long time, for many years. Because, sometimes what will happen in the past, you would pay the debt, and then several years later you’ll get a call from another collector trying to collect the same debt from you. So unless you have some proof from file that the debt is already paid and so on, you’ll be in trouble, so get organize. The next thing is, if somebody calls you and tries to collect debt from you, it doesn’t necessarily mean that they have legal right to do so. On the contrary you have the legal right to request validation and they have to provide in writing all the documentation that they have the right, that this account is coming from this and this particular original creditor and then they legally acquired the right to collect this debt. Even more, you have the right to request the detailed explanation of all the charges on the account, before you start making payments or any agreements. Make sure to ask for that, and make sure to put it in your file. The next thing is to make payment arrangements without making arrangements of what the collector will do to improve your credit report. For them, it’s important to receive the money, for you, it’s important to remove negative record from your credit reports. So you have to put it in writing that, well usually the way it works, you agree that they will send you a letter, on their letter head, signed by their manager, usually they send it by fax, where they will specify that if you will make payment or several payments by certain dates on this account, then, they will make a note that this account is paid completely, the remaining balance is zero. That they will never collect from this account again and no other company should collect on this account and that they will notify credit reporting agencies or if they cannot do it themselves, they will involve the original creditor to send message to credit reporting agencies to remove negative record from your reports and also that they will give you a letter which states all that after you make the payments. So, if necessary you will have to prove your case later with credit reporting agencies, you will have to, this paper to protect yourself if somebody else will try to collect from you in the future. So it’s very important for you to receive this document before you start making payments. The next mistake people do is signing something, signing some agreement without truly understanding what they’re getting into. And you may in fact get yourself into more trouble than you were before by doing so. So always take at least a day or two to sleep on it, to think about it, to consult, if not with a lawyer, to maybe with your friends and family. You always have a day or two, collection agency may try to push you, they are trained to apply pressure, so don’t be submissive here, take your time before you sign anything. Another major mistake people do is when arranging the payments, they give their personal information, their credit card number or checking account number, giving the right to debt collector to take the money from this account. Well maybe their arrangement was they suppose to take a hundred dollars a month, but then suddenly the debt collector takes the whole balance at once. And then it will be very difficult to get this money back from them and it may be a major, major inconvenience for you, so never do this. To make your payment, also arrange that you’ll pay either by money order or by wire transfer, and not by wire transfer from a checking account, but from one of the offices that you can find on the streets. Next major mistake is, if debt collector will try to sue you, whether or not they can win, you have to show to court to protect yourself. Because if you will not show to court, then you will lose by default, that means that this will validate the debt and plus the legal expenses, collection charges, or whatever they put on top of it, you will get a fresh judgment against you on your report which will stay for 7 years and you will have to pay this debt now. Whereas if you will show to court, chances are, that collector will not be able to prove their case as required by law and then you will be free and clear and you will not have to pay anything in this debt at all. So these are the several major mistakes people do, don’t do them, this is Lev Selecter with 101creditrepair.com. I recommend you visit our website where we have our guides, more videos like that, a lot of information which will help you to improve your credit score. Thank you.