When you run into a default situation with credit card companies, they have a variety of options in trying to get your money. Frequently, this debt is sold to credit collection companies, and their methods of getting your payment run the gamut from persistent phone calls and letters to legal action. You may be evading these collection agencies, but once you reconnect, you can run into a variety of collection payment problems.
Nonpayment
Nonpayment usually goes to the collection agency after the credit card agency has exhausted all means to collect payments. The amount of time this takes to occur varies, and after a credit card company hasn't seen a payment from you, the account balance on that credit card appears as zero on your credit report, and the debt officially belongs to the collection company.
Persistent Contact
If you evade the collection company for months and then try to reconnect to start paying them back, be prepared to be asked for all of your current contact information, including phone number and address. Moving forward, if you default on any agreed-upon payments, you will hear from the company on a regular basis.
Pressure to Make a Deal
Collection companies often will provide you a deal--perhaps if you agree to pay a certain percentage of the debt up front, you can pay less on the debt in the long run. This is a sound decision if you have the money, but if you don't, you could run into more problems. If you question whether you have the money for the deal, agree on smaller monthly payments. Be advised, however, that these collection companies can be very persuasive in sealing these types of deals.
Direct Withdrawals
If you do decide to settle on a deal, the company will likely ask for your checking information so that they can directly take the money from your account, either in one lump sum or a monthly amount, depending on the agreement. Make note of these transactions and be sure there is money in your account at the time of withdrawal.
Considerations
Even though you could run into payment problems with collection companies, it really is best to make a deal with them if you have the money. Not only can you start to clean up your credit score, you can avoid legal problems and lift the burden of owing somebody money. Depending on the state, you also can avoid having your earnings garnished.
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