How to Make Payments to a Commercial Collection Agency?

There are many ways in which a debt in collections affects your life. It limits new financial opportunities and credit scores for you. What should you do in this case? Well, chalk out a plan with the agent and pay off your debt. Never under any circumstance ignore them. It will result in more financial complications. Once an agency starts contacting you, you should start planning.

You might think that the original creditor will get involved in the payment. No. Instead, once the commercial collection agency contacts you, the entire case is theirs. The whole payment plan has to be run by them. No contact with the original creditor is advisable. 

Before talking about the payment strategies, let's begin with the basic question-

What is Debt Collection and How Does it Affect You?

Debt collection is a procedure through which an agency collects your due debts. When you owe money to creditors, they hire debt recovery services. This assures them that the unpaid dues will get cleared. Depending on the kind of due, a time frame will get decided within which you have to pay back the sum. 

There are legal consequences if you do not establish contact with the commercial collection agency. In all certainty, they will take you to court. Most of these agencies have experienced lawyers on their teams to aid the process. It is always advised to pay the dues back as soon as you can. Do not under any circumstance keep these agencies on hold. Take out time to talk with them and settle with a smooth payment plan.

Now, that we have established the importance of debt collections, it is time to discuss the payment plans. These are the steps you need to keep in mind to understand how to pay off an unpaid debt-

Make Sure the Debt is Yours

Do not haste while making payments to a debt collection agency. Usually, agencies providing debt recovery services, do not make mistakes. But it is better to be cautious. First, confirm the debt issues in your name, belongs to you. Here is the area where you can contact the original creditor. Cross-check with them if the agency that has contacted you, is the correct one. Second, check the records to make sure that the amount is correct. If all the checks are positive, go ahead with the payment.

Estimate How Much You Can Pay At a Time

Once you determine to pay back the agency, it is time to think about your finances. Before contacting the agent, review your budget. When you review your budget, it will become clear how much can afford to pay, at a time.

Original Creditors hire these collection agency services to make sure that you will make the payment, as soon as you can. They have strategized plans for it. It is important for you too, to pay off all the outstanding debts. But, do not, in any case, make a mistake while hurrying. Understand how much you can pay and then decide on the payment plan. If you fail to uphold the repayment agreement, it will land you in a lot of financial trouble.

These agencies who offer credit collection services mostly have two payment options-

Lump-Sum Payments:

This requires you to pay off the dues at once. Generally speaking, this is the fastest way to pay back all dues. You can negotiate with the agent about the amount. They will be willing to listen to your suggestions as you are paying the whole amount back at once.

Installment Payments:

This is one of the popular ways of paying dues back. You can avoid the strain of repaying a huge debt, all at once, with this method. But agencies do not offer any concessions on installment payments.

Depending on your finances, you can decide which option to choose for repayment of debt.

Establish Civil Contact with the Agency

Since you have determined how much you can pay, it is time to contact the agency. Some debtors try to engage third parties to contact the agencies, but it is best if you do it yourself. It is important to understand the agency's point of view. This will provide the necessary clarity in every step of the payment plan.

Here's what to ask them-

  • Ask for the agent's name and contact information. This will help you search about the company and other relevant information.
  • Request them to send you a written copy of your agreement. This will include all the payment information, credit report, etc.

Make Your Payment

Now, you have the written agreement from the agency. Make sure you have reviewed it for accuracy and then go ahead with the final payment. Submitting your payment will relieve you from all financial strains. You can start making new financial plans with a renewed credit score.

What are you waiting for? Make necessary plans and execute them smoothly to pay back your dues. Do not forget to review the accuracy of every plan that you make. This will keep you safe in the future.