Account Gone To Collections? Here’s The Silver Lining

While I’m now proudly debt free it wasn’t always that way. It wasn’t so long ago that through a series of unfortunate situations – some my fault and some not – I really backed myself into a financial corner.

My debt was piling up while my income struggled to cover even the minimum payments. Eventually, as the interest piled up, we crossed a “debt threshold” and I started to miss even these payments.

It was a miserable time, trying to avoid phone calls and letters from my creditors. Trying to juggle payments so that I was no more than a month behind on any of my debts.

Eventually, I received a letter from one of my credit card companies telling me that my account had “gone to collections”.

In essence they’d got fed up with chasing me and had sold the debt onto a debt collection agency who were now about to start chasing me. Oh, fun!

Until that point in time I’d truly tried to do everything possible to avoid this situation. Yet it had still happened. To say that letter took the wind out of me would be something of an understatement.

The letter stated that I had to call the collection agency within the next 7 days or risk some pretty hefty-sounding consequences. So, after about two hours of trying to build up the courage (I kid you not!) I nervously dialed the number, literally shaking with fear over the conversation I was about to have.

But what happened next surprised me…

Initially the agent I spoke to was pretty remorseless. They were presumably on some kind of commission structure and their goal was to try and extract all the money from me in one go; something I most certainly didn’t have the funds for.

So I stuck to my guns. Firmly but politely I told them I was as keen to settle the debt as they were but the outstanding sum simply wasn’t possible.

I suggested a repayment plan – where I would pay a set sum each month like clockwork until the debt was paid. In exchange they’d halt any interest on the debt and leave me alone without constant letter and phone calls.

The agent softened. My honest – if rather depressing – summary of the situation seemed to do the trick. What sort of payments was I offered he inquired?

I made an offer. He counter-offered. I explained the reasoning behind my original offer. Eventually, he accepted. We set up the payments to go out of my bank account and into theirs like clockwork at the end of every month and that was the end of it.

So here’s the silver lining…

Previously I’d been struggling (and failing) to make the minimum payments enforced on this credit card by my bank. However now they’d sent it to collections, the debt collection agency not only agreed to payments that were lower than I was trying to pay the bank each month but they also froze my interest payments altogether.

This meant that not only were the repayments more reasonable (and affordable) but overall I also paid far less than if the debt had stayed with the bank.

And with the lower monthly payments I had enough left over to ensure that I was now meeting my obligations to all my other creditors. In other words my debt repayments were now back on track and it was only a matter of time until I became debt-free.

Don’t worry – I know it’s not all good news. This whole situation left a very nasty blemish on my credit report; something that I’m still working to resolve as we speak.

But the fact is that dealing with the debt collectors wasn’t nearly as painful or unpleasant as I expected and actually helped my financial situation at the time. So if you find yourself in a similar situation don’t despair; remain polite yet firm and negotiate yourself a financial situation that you can live with.