How Do I Stop an Account from Going to Collections?

There are many reasons why you may have unpaid bills, and you do not need to feel ashamed

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Medical bills, family emergencies, and job insecurity impact millions of Americans every year and create financial stress. If you find yourself in this situation, there are ways to prevent unpaid bills from going into collections by maintaining communication with creditors, staying on top of late payments, and making payments on past-due debts.

Enlisting the help of a credit repair group can help you navigate your finances and keep you on track. Financial hardship can be distressing and overwhelming if you are not well-versed in the complex system of collections and credit–luckily, credit repair services in Miami, such as The Phenix Group, can help you manage your accounts and credit. We can help you ask for information to be removed from a credit bureau report and understand how long collection disputes can take

In the meantime, if you are in a tight spot, you want to avoid having your debts going to collections. When collection agencies get involved, your credit score drops, and your future ability to apply for loans and credit cards could be hampered. 

Ways to Stay on Top of Your Bills 

Here are some quick ways to keep your overdue bills from going to collection agencies:

1. Make Payments on Past-Due Bills and Debts

We know it isn’t always possible to pay every bill due in full. However, making any amount of payment towards a bill on a consistent basis is far more favorable than simply letting them go unpaid. A good rule of thumb is that a partial payment is better than no payment at all.

If you are willing and able to make any payments towards your bills and debts, some creditors may be willing to work out a payment plan with you. This could be a multi-month settlement to help you catch up on those past-due bills.

2. Stay on Top of Your Thirty-Day-Late Payments

Late payments can accumulate quickly. Don’t let that thirty-day-late payment become the sixty-day-late payment, because that could easily double the amount of money you will owe. Chances are, if you are in this situation, you can’t afford for this to happen.

If you really can’t avoid that sixty-day-late payment mark, reach out to your creditor. You may be able to work out a plan for a hardship settlement. A hardship settlement or payment plan varies from company to company, but generally provides some short-term debt relief. This can include lowering your monthly payments, waiving late fees, and deferring payments. There are other options that can be explored, as well, which is why keeping that line of communication open with your creditors is so important.

When you make arrangements directly with your original creditor, there are usually more options than what is available when dealing with collection agencies. Collectors tend to be less flexible and are more aggressive in their approach, which is why you want to catch up on payments as much as possible and start communicating with creditors earlier rather than later.

3. Open Communication with Creditors

Speaking of maintaining communications with creditors, doing so can get you the support you need much sooner. We highly recommend that you start talking with them before you reach the thirty-day-late stage. We do not recommend you wait for your creditor to reach out to you first about payment delinquency.

Being the one who opens lines of communication will show that you are willing to be responsible and work out a plan. You want to be proactive when it comes to repaying your debts, and this can help creditors give you more flexible options in terms of repayment. When all is said and done, it is your responsibility to make repayments on your debts. By showing that you are trying to repay what you owe, you can prevent your account from going to collections.

For more tips on credit management and support, contact The Phenix Group for an individualized plan to get your credit where you want it. We’re ready to help!

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