10 Things You Didn’t Know About Collections Agencies
If you’re in debt and are starting to receive calls from collections agencies, it may be time to seek debt consolidation help from BHM Financial. Read on to find out 10 things you may not have known about collections agencies. Find out more about what to do to deal with insurmountable debt.
What Happens When You Get Sent to Collections?
When collections agencies start calling, it’s because the companies or utility providers you owe money to have been unable to retrieve their funds. So, they have enlisted the help of a third-party to track you down and ensure their bills are paid. This means your bills will even more expensive. In addition to the interest accumulating on your accounts, the debt collectors also take a portion to pay for their services. This means extra fees for you.
If collections agencies are starting to call you for money, your finances – and most certainly your credit – are taking a huge hit. You don’t want to remain in collections for very long. It’s time to repay your debts and make your payments manageable through a debt consolidation solution.
10 Facts About Collections Agencies
Hundreds of thousands of Canadians go into collections every year and not everyone fully understands the implications of this. Here are a few facts about collections agencies you nay not have known before.
1. You Can Ask for Proof
If collections agencies are calling you for money, you have the right to ask them to send you written proof of the amount you owe. This means they will have to send you a breakdown of the unpaid fees. Just because they call and say you owe a certain amount, doesn’t mean you have to accept it as true. If you believe the fees being demanded are way too much. Exceed what you believe you owe the debt collector, ask for proof.
Collections agencies must be able to provide this proof to you and do not have the right to refuse your request. You may also want to keep track of other information from the call including the name of the agent, the company the work for, the provider they are calling on behalf of, and the total amount they are requesting you pay back.
2. You Can Ignore a Collections Agency, But Shouldn’t
You can continue to ignore calls or letters from debt collectors if you do not have the funds to pay. However, just because you can, doesn’t mean you should. In some cases, depending on the total owed, a debt collector may want to cut their losses and discontinue their pursuit for the funds you owe. But they can also take you to court if you continually dodge their calls and refuse to pay.
In addition, not paying back your debt will affect your credit score. Though you can get a loan with BHM Financial with bad credit, you may not be able to secure a new job. If an employer requires a credit check, they may refuse your candidacy based on poor credit history. The best bet is to pay off your debts as quickly as you can and aim to rebuild your credit sooner rather than later.
3. Collections Agencies Cannot Call Anytime
If you receive a call from collections agencies prior to 7 am or past 9 pm Mondays through Saturdays. you do not need to take the call. In most provinces, this is illegal.
Collections agencies may also not call you anytime on a Sunday. They are only allowed to call between 1 pm and 5 pm. They may call you daily, but in some provinces, this is illegal, too. Brush up on the consumer protection laws in your province to know whether or not you need to take the debt collector’s calls.
4. They Can Pursue Decades Old Debts
Collections agencies may pursue you for debts that are decades old. This mean debts from your youth can still come back to haunt you later on in life. However, all they can do is continue to call and ask. If the debt collector does not take you to court within two to six years (it varies by province) after you acknowledge the debt, they cannot sue you.
In other words, the debt collector may continue calling you for 20 years but they can’t actually sue you after the statute of limitations has passed. In fact, you can file a complaint for harassment with the consumer protection agency of your province to get the debt collector to stop calling you.
5. Collections Agencies Cannot Threaten You
Legally, collections agencies may not threaten you to get their money back. They may not use foul language or resort to threatening you or your family in any way. The only threat they can make is to sue you.
However, as stated above, if the statute of limitations has passed, that is simply an empty threat. They cannot sue you beyond that point. And again, you can file a complaint with the consumer protection agency in your province to get them to stop calling and harassing you.
If collections agencies call you with threatening language or threaten to harm you, you will have ground to sue. This is illegal and the Canadian government has strict rules about protecting consumers from harassment in this area.
6. Collections Agencies Cannot Share Your Information with Friends
Collections agencies are legally allowed to contact your friends, family, neighbours or even your employer. In order to obtain more up-to-date contact information for you. This happens a lot if debt collectors are having a hard time getting a hold of you. However, they cannot discuss your private financial matters with them. They may not share details on the amount you owe or to whom it is owed. They may only ask for your updated contact information.
In the event that a debt collector reveals private information, you have the right to file a harassment complaint with the consumer protection agency in your province. Details of your dispute are private and they do not have the legal right to share such information with anyone without your authorization.
7. Keep Proof of Payment
You may continue to receive calls even after your debt has been paid. Because so many people try to avoid paying debts to collections agencies, they may not believe you when you say the debt has been resolved. In order to stop the incessant calls, be sure to keep proof of your paid debt for at least one year. This way, if anyone calls you, you can show them proof and get them to finally stoop calling you.
8. Being Put in Collections Affects Your Credit Score
Being in collections affects you credit score. it will continue to negatively impact it until you get out of debt or declare bankruptcy. which should be your ultimate final resort only. The good news is that you can begin to rebuild your credit again rather quickly once the debt is paid off. If you cannot pay your debt, it may be a good idea to get a personal loan to pay it off and get your finances back on track.
If collections agencies are calling you, you can be sure your credit is taking a big hit. Before your credit stands in the way of you getting a good job or competitive interest rates on loans, cut your losses with a personal loan for debt consolidation from BHM Financial.
9. You Can Negotiate with Collections Agencies
If your debt is way more than you can afford to pay back, you can settle with the debt collector on some instances. If your amount is too high, the debtor risks not receiving their money at all. Accepting a lesser amount may be in both their best interest and yours. Though there are no guarantees, you can ask for debt relief and see if there is any way to negotiate a better deal for yourself.
If debt collectors are calling, your credit has already been affected. They have made contact with the credit bureaus and your credit score and report now reflect the defaulted payment. You have nothing to lose by asking them for some sort of deal. They may be more willing than you think to lower your total. This way, they get something for their trouble and you can kiss that debt goodbye for good.
10. They Can’t Charge You for Legal fees
If a debt collector threatens to sue you and hold you responsible for the legal fees, they are throwing out empty threats. Collections agencies do not have the right to charge you for anything other than the amount you actually owe. Any legal fees acquired through pursuing you are at their expense and not yours. They may also charge the provider who filed the complaint against you in the first place. But they do not have the legal right to transfer the fees to you, the consumer.
If collections agencies are threatening to charge you for their legal fees. You may politely let them know they are not legally allowed to do so. In fact, you may even file a complaint with the consumer protection agency in your province for harassment.
What Happens After 7 Years of Not Paying Debt?
If you have avoided your debt collectors for seven years. Know that the original damage done to your credit will be removed. An old debt will not continue to affect you after that point.
However, during the period before the statute of limitations expires, collections agencies can sue you. Have the government deduct from your wages to pay off your debt.
Being in a collections agency debt problem is not a situation you want to be in. That’s when it’s time to see a debt consolidation expert. Find out what you can do to resolve your debts with as little damage to your financial record. your financial future as possible.
Is it Better to Pay Off Collections or Credit Cards?
There really isn’t much difference here. Both of these debts are factored into your credit report. The goal you should have is to pay off your debts as quickly as possible so you don’t damage your credit any further.
If you’re in financial trouble, meet with a debt consolidation expert at BHM Financial today. Our experienced staff will help you by consolidating your debt into one single payment. They’ll get creditors off your back and help develop a repayment plan you can actually afford.
The ultimate goal when it comes to managing your finances is to achieve financial freedom. Keep your credit in good standing along the way. If you have found yourself in financial trouble, don’t wait for tour debt problems to overwhelm you. Get the help you need today to get your finances in order.
Should You Ever Pay a Collection Agency?
Some will advise you never to pay a collections agency. This is because whether you pay or not, the damage to your credit has already been done.
However, paying it off will help you start rebuilding your credit and you won’t have to risk being sued. If a collections agency does sue you, they may gain the right to garnish your wages and pay off the debt that way. This isn’t a situation anyone wants to be in.
The best thing you can do is avoid collections in the first place. Not sure how? We can help.
Does Unpaid Debt Every Go Away?
Your debts can hang around for a lifetime. Creditors may not be able to sue you forever but they can definitely call and ask you to pay over and over again. They can find you after you’ve moved, call your employers, contact your friends and family. call you as many times as they are legally allowed to per week, every week for the rest of your life. The ability to sue you will be gone after a few years and your credit history won’t reflect it after seven years. But you will still run the risk of having your funds seized by court order.
That’s the long answer, but the takeaway is short. No, unpaid debts never go away. No one needs that sort of stress sin their life. That’s why we recommend debt consolidation long before you find yourself in this position. Once you are drowning in debt, it can be an uphill battle to make it out of it alone. Instead of dealing with this headache for the rest of your life. Meet with our financial experts to see how you can manage your debts wisely today.
How Do I Stay Out of Collections?
If you have a debt problem and are looking to get out of it and stay out of it, we can help. At BHM Financial, we can help you pay off your debts, reduce your minimum monthly payments. Provide you with the financial advice you need to stay on the path to financial success.
The best way to stay out of collections is to take control of your finances. Your debts before they hit unmanageable levels. With job loss at an all-time high thanks to the unforeseen global pandemic we are living in, debt can easily take hold of any family.
The trick to staying out of collections and keeping your credit in good shape. Call us for help before you get into a situation like this. By asking debt consolidators for help, you are actually starting to take control of your financial situation.
We can help you make your payments manageable and get other collectors to stop bothering you. This will reduce your stress and allow you to focus on repayment of your one single debt. Plus, we work with you to create a flexible repayment plan. The goal is for the repayment plan to be feasible so you don’t risk defaulting and damaging your credit further.
Why Get a Bad Credit Loan from BHM Financial?
Getting a bad credit loan to help pay off your debts. Keep you out of collections is a wise financial step for anyone suffering from debt problems. We don’t take your credit score into account at all. Paying off your debt with us will actually help improve your credit rating. Our goal is to help you before the situation becomes unmanageable or leaves you with a bad credit report for a solid seven years.
Getting a bad credit loan with us will help you pay off those outstanding debts. Keep debt collectors from beating down your door or harassing your loved ones for contact information. No one wants to be on a list at a collection agency. We will help you plan and budget accordingly so you can pay back your debt comfortably. Set yourself up for financial success in the future.