How to Stop Collection Calls and Debt Harassment

If you find collection calls annoying or stressful, you may be thinking of disconnecting or changing your phone number so that you finally have some peace of mind. This is not the best of ideas, however, as you will have to deal with your debts at some point in time. If you want to stop collection calls, one thing to do is to let them know your preferred method of communication is in writing. This will work in your favor by all means because you have a record of everything the collector and you have said. If you find that your debt collector violates the law, you have evidence on your hands and can initiate legal action against them.

It is important not to get overexcited though. Your creditors are the ones you owe money to, and they have their rights too, which is to collect their money. If you refuse to communicate with them, there is no way they know your situation. With this in mind, there are rules in place which debt collectors are required to follow.

To handle the situation properly, find out what debt collectors can and cannot do. While the legislation is similar in all territories and provinces of Canada, it is not identical. In general, collectors are allowed to call and contact you, but calling fifteen times a day is considered harassment. Calling once a day is not, however. If you believe this is what they do (they harass you), keep record of the frequency and time of collection calls. You will need this information if you want to make a complaint against them. Another thing to know is that debt collectors are not allowed to contact your neighbors, relatives, or friends to ask for information. One exception is if they need your phone number or your address. Other exceptions are if another party has cosigned for a service or goods you purchased.

One way to stop collectors from calling is to write a cease and desist letter. This is a type of letter which requires that an institution or an individual stop certain action against you, refraining from doing so in the future. In case the recipient fails to comply, legal action may follow. A cease and desist letter can be written by anyone, but keep in mind that this letter does not apply to the original lender and only to debt collectors. The purpose of the letter is to stop any sort of communication between you.

What happens after the debt collector receives your letter? They are allowed to communicate with you one more time and via mail, informing you of one of the following: the debt collector may take certain actions; the debt collector will terminate further efforts to contact you and collect debts; or the collector is certain to take actions against you.

Send the letter by certified mail, as to prove that the letter has been received. If the collector communicates with you more than once, you can seek a punitive action against them.

 

Top Reasons Why You Should Seek Debt Settlement

There are many reasons why borrowers seek debt settlement, the main ones being interest rate reduction, single monthly payment as opposed to multiple ones, elimination or reduction of late payment fees, improving your credit score, and the opportunity to get rid of debt faster.

A major reason to look into debt settlement is the chance to lower interest rates on debts and bills by negotiating with your creditors. One way to do this is to use the services of a debt consolidation company, and its experts will negotiate interest reduction on your behalf. The collection agency, if it happens that your debt has been sold off, or your creditors may restructure your payments so that they are easier to manage.

The collection agencies or creditors can arrange for a new debt repayment plan so that the principal balance can be paid back in full, together with some of the interest. When you participate in a bill consolidation or debt consolidation program, this plan is prepared in such a way that you do not default. It helps you better organize your finances, allowing you to save some money.

Having just one monthly payment to make is another reason to seek debt settlement. By participating in a debt consolidation program, the debtor is required to make one monthly payment toward paying off their debts and bills. Those who use the services of a consolidation company make one payment to it on a monthly basis, with the company dividing and disbursing the money to all lenders. In this way, debtors do not have to deal with multiple payments and risk being late on one or more of them. Moreover, they will not make payments at different interest rates any longer.

Credit rating improvement is another reason to seek debt consolidation. In fact, few things can affect your credit score worse that late payments and piles of debt. With debt consolidation, borrowers are able to pay back their outstanding balances quicker, helping them improve their credit score all along. Having a lower balance acts to enhance one’s credit utilization ratio, the latter being a major factor in determining the credit score.

Not only will debt consolidation improve your score, but consolidation reduces the money you will be spending on interest, making it possible to get rid of debt faster. Given that your monthly payment does not increase, you will be able to pay back your balance in the shortest period possible. Once you complete the program, you are done with debt rather than spending years or decades just covering the minimum payment.

While debt consolidation offers some obvious advantages, you may wonder what some of the disadvantages are. For one, debt consolidation does not work as planned every time. If one or more of the lenders passes your debts to a third party, which is less scrupulous, or goes out of business, debtors can find themselves in legal and financial trouble. Finally, you may not get the interest rate you hoped for.

How to Declare Bankruptcy and Live with It

In Canada, filing personal bankruptcy allows borrowers who are knee deep in debt to get a fresh start by eliminating most of their debts. Once you have filed bankruptcy, wage garnishments and collection calls will stop, and you will be able to plan for your financial future. Given that bankruptcy represents a legal process, legal [...]

Continue reading →

Top Facts about Debt Consolidation Loans

If you wonder whether to consolidate your loans and if this is the right option for you, you may want to read some important facts about debt consolidation. First, debt consolidation can lump together two or more unsecured loans into a single unsecured loan. More often, however, it involves consolidating loans into a secured loan [...]

Continue reading →