How to Respond to a Collection Agency

When financial troubles arise, some overdue bills may be turned over to a collection agency for handling. No matter the reason for your inability to pay your obligation on time, you will have to communicate with the collection agency in order to resolve the matter. How the matter gets resolved, however, is up to you. Here are some steps you can take to effectively respond to a collection agency and resolve a delinquent debt.

Instructions

Get the Facts

1

Know what you owe. Chances are, if a bill has been turned over to collections, you already had some idea that it was going to happen. Even if you cannot pay a bill on time and you didn't communicate with the original creditor, you still need to keep track of the debt and be aware that interest charges and other late or non-payment penalties may be accruing.

2

Stay ahead of the game, if possible. Even if you know an account may have been turned over to collections, you still have the chance to make it right with the original creditor. Call them and ask if you can make arrangements to settle the account. Some creditors will work with you, even if the account has been turned over to collections already. If the debt was sold to a collection agency, however, the original creditor will no longer be able to work with you in resolving the debt. They should be able to provide you with contact information for the agency that is now handling the debt.

3

Adjust your attitude and prepare to conduct a professional, non-emotional conversation with the collection agency in question. This will be much easier if you have not avoided contact by ignoring letters and phone calls. Communications will go downhill fast if you approach the matter with a defensive, argumentative demeanor. Take a deep breath, put your pride on the back burner for a moment and realize that this is something that has to be done. The sooner you deal with the issue, the quicker it will be resolved, and you won't have to contend with nagging phone calls and letters any longer.

4

Call the collection agency. If you have yet to hear from them, via phone or mail, more than likely they will be elated to hear from you! Explain your situation and be honest about why you have not been able to settle the account up to this point. Before you get into making any kind of arrangements, however, be sure to get the name and extension number of the person to whom you are speaking and also the name and extension number of anyone else who may be handling your account.

5

Do not make promises you cannot or do not intend to keep. This will only make things worse for you in the long run. Make a workable plan before you ever contact the collection agency, so that you will know what you have to work with and won't be easily swayed or pressured into payment arrangements you cannot honor.

6

Require a written copy outlining any agreement that you have reached over the phone and require that they send this letter before you will send any payments to them. You may also want to require that the collection agency promise, in writing, to report that this debt has been resolved to all major credit bureaus once you have made all promised payments. Even if you are working with the most agreeable collection agency ever, you need to protect yourself by creating a paper trail.

7

Begin making payments, as agreed. Send a copy of the agreement letter with each payment and make copies of any checks or money orders that you send to them for your records.