📨 Debt collection

What debt collection actually means

If you're unable to pay a bill, you'll first receive payment reminders. That's the company that sent you the bill trying to get you to pay. Already at this point the amount increases, because the company that sent you the bill now has extra work collecting their money. If you still don't pay, the company that sent you the reminders will eventually escalate — or simply ask someone else to collect their money. The ones who do that are called debt collection agencies. These companies earn money for every day you don't pay your bill. This is also where the word "interest" comes in, and the amount you originally owed can grow enormously. Ending up in debt collection absolutely doesn't pay, but if you do end up there, pay the bill as quickly as possible to stop it from growing bigger.

How to move forward

As I mentioned above, the amount you owe grows every single day. It doesn't matter how large the original bill was. The creditor — that is, the debt collection agency — does everything in its power to collect the money. In some cases, it can get so bad that even the debt collection agency gives up. Then the money is often collected directly from your paycheck.

The most important thing to do if you end up with a debt collection claim is either to pay it immediately, if you're able — otherwise, simply contact the debt collection agency. Let them know that you've seen the bill and fully intend to pay it back. The vast majority of debt collection agencies will gladly take your call and help you. We have contacted many different debt collection agencies on behalf of others, and not once has the conversation been a bad one. Everyone understands that sometimes "life happens," as they say. Things go down the drain. But show up and demonstrate that you want to get rid of the problem. Ask if they have a payment plan, or if they can at least postpone their claim. Be completely honest and tell them when you plan to pay them back. You will most likely save money by having this conversation.

How to avoid it happening again

Sometimes life gets to be a bit much, and we ignore certain things. But your bills — both the ones you receive directly and the ones that show up in your online bank — deserve a few minutes of your day. Keep track of what's coming and how much you owe. Make it a hard priority not to let bills sit past their due date. If you can't afford the bill today, you certainly can't afford the bill plus penalty fees tomorrow.