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Debt Relief: Difference between revisions
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The following information is designed to answer questions about debt and offer solutions to control it. Contents range from financial planning to [[Debt Relief:Definitions#debt Consolidation| debt consolidation]], [[Debt Relief:Definitions#credit reports | credit reports]] to [[Debt Relief:Definitions#bankruptcy | b | The following information is designed to answer questions about debt and offer solutions to control it. Contents range from financial planning to [[Debt Relief:Definitions#debt Consolidation| debt consolidation]], [[Debt Relief:Definitions#credit reports | credit reports]] to [[Debt Relief:Definitions#bankruptcy | b | ||
ankruptcy]], and more. | ankruptcy]], and more. | ||
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Most financial experts agree that bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. Filing for bankruptcy remains on your credit report for a period of ten years, making it more difficult to obtain credit in the future. | Most financial experts agree that bankruptcy should always be the last resort used for managing your debts. Bankruptcy has long lasting results. Filing for bankruptcy remains on your credit report for a period of ten years, making it more difficult to obtain credit in the future. | ||
==Collection Agencies== | |||
A Collection agency is not the same as a debt counseling service. | |||
Collections agencies are employed by creditors to recover money owed to them. | |||
Creditors wait from six months to two years before turning a bad account over to a collection agency. | |||
There are different reasons why the debtor ends up in collections: poor money management skills, illness, no money to pay, and sometimes the debtor just does not care to repay the debt. | |||
The following information was gathered in an interview with Sandra Harden, Manager of Bibb Collections. | |||
* A collection agency goes after an individual who will not pay a debt. This debt is anything from medical bills to florists bills. | |||
* A Creditor may not employ a collection agency for 6 months to 2 years after the debtor is delinquent. | |||
* Bad debt is referred to a collection agency because the debtor has ''poor money management skills, is ill, or has a lack of desire to pay'' what is owed. | |||
*Collection agencies charge a percentage o | |||
f what is collected as a fee for the service. | |||
*The methods used by credit agencies to collect unpaid accounts are telephone calls to the debtor, [[Debt Relief:Definitions#Sue or suit|lawsuits]], and [[ Debt Relief:Definitions#Garnishee or Garnishment|garnishments]]. Collection agencies will provide a pay plan as well. | |||
*If the debtor does not pay using a pay plan, the collection agency will [[Debt Relief:Definitions#sue or suit|sue]] or [[Debt Relief:Definitions#garnishee|garnishee]] the wages until the debt is settled. | |||
Something to keep in mind: If there is debt, it does not go away if ignored. The best way to manage it is to face it head on and explore options available. | |||
[[Debt Relief:Definitions#Bankruptcy|Bankruptcy]] is recommended by collection agencies if the debt is severe and there are personal reasons for not being able to pay. | |||
Credit counseling is also recommended. | |||
== Project Documents == | == Project Documents == | ||