How to Avoid Credit Card Collection

According to the Unites States Department of Labor Bureau of Labor Statistics, employment of bill and account collectors will grow around 19 percent between 2008 and 2018. By 2018, they estimate that almost 500,000 people will be working as bill collectors. Judging by the expected growth in the collections business, more people will be defaulting on credit cards. With some effort you can avoid credit card collections and the stress that credit card collections brings. A proactive approach is important in this.

Instructions

1

Pay your bills on time. While this seems obvious, there is no better way to avoid credit card collections. Plan your household budget carefully to ensure that you have money enough each month to pay at least the minimums on your credit card bills. Make sure that you have a written budget and all family members are willing to comply with it.

2

Call your creditors if you might be late on a payment. Taking this step in advance can save you some trouble. Be honest with them, and tell them why you are having trouble paying. Be realistic about when you will be able to pay the bill and how much you will pay. Reinforce the dates that you will be paying them, and keep your word. Keep a record of all communications with the credit card company. This is helpful because you will know exactly what you said to the service agent from the company.

3

Send a debt verification letter if you receive a bill in error or a bill with inaccurate charges. In this letter ask them to show proof that you owe the debt and proof that the collector is legally entitled to collect the debt. Stand your ground even if the creditor resists. By law they must verify a debt when asked. Send the letter certified with return receipt.

4

Negotiate with your creditors if you are far behind on your bills. While you may already be in collections at this stage, you can avoid further collection action. Do whatever you can to put together a lump sum settlement with the creditor. To negotiate the best deal, be ready to pay them in cash immediately.

5

File for bankruptcy if you have more bills than you will ever be able to pay. Again, you are probably already in collections by the time you get to this point, but you can avoid further collection actions and lawsuits by seeking bankruptcy protection. Once you contact a bankruptcy attorney, the collectors for your creditors will need to talk with your attorney if you tell them to. Once you have filed for bankruptcy, the collectors cannot contact you or attempt to collect the debt. While drastic, bankruptcy can be the best solution for your situation.

6

Tell collection agencies not to contact you any more. You can send a creditor a letter asking that they do not contact you. After you send the letter, the only reasons that they may contact you is to acknowledge that they received your letter and will not be contacting you again or to tell you that specific legal action will be taken.