It’s more beneficial to deal with the original creditor of your debt as opposed to a debt collector because the original creditor can listen to you and is willing to restructure your debt repayment schedule to suit your current financial situation.
Debt collectors, on the other hand, are out to collect their dues in whatever manner that works for them. Some debt collectors will even call you and your relatives at odd hours just to pressure you to repay by making life uncomfortable for you.
This is why it’s a good idea to learn effective tips on how to avoid debt collections. You also need to find a reliable and well-established New York credit repair company like The Phenix Group to help you repair your credit and avoid dealing with debt collectors.
But what makes it better to deal with the original creditor over a debt collector? This article explains the advantages and disadvantages of dealing with each.
Original Creditors Versus Debt Collectors
If possible, you should always pay the original creditor instead of waiting for them to send debt collectors to you. Here are the main reasons why:
Better Credit Score
Waiting until your creditor sends debt collectors to you will damage your credit score because the credit bureau will include the debt collection account in your credit report. This will hurt your credit score and make it difficult for you to obtain credit later.
Credit bureaus consider debt collection reports and charge-offs as a very serious indictment on your part. So, any debt collection account on your credit report will instantly cause your credit score to drop.
Restructuring Your Debt Repayment Schedule
As noted above, dealing with the original creditor offers you an opportunity to negotiate for debt restructuring, especially if you’re no longer in a position to continue with the initial repayment schedule.
Many creditors understand that you can lose a job or your business can suffer a temporary setback due to unforeseen circumstances. Therefore, they tend to be a bit lenient with their debtors when structuring their repayment schedules.
So, if you run into problems when repaying your debt and you can’t meet the existing repayment terms, reach out to your creditor and request a restructured repayment plan.
Peace of Mind
Dealing with debt collectors can be a nightmare. Many collectors will employ all manner of debt collection tactics, some of which amount to harassment. As mentioned above, some debt collectors will call you and your relatives incessantly, including at odd hours just to force you to repay what you owe. Others will notify your employer or work colleagues of your debt, subjecting you to ridicule and emotional torment.
Additionally, debt collectors might threaten to collect more fees than you owe them if you don’t pay immediately, and others may threaten to send auctioneers to your house or office. All of this can result in emotional and physical stress.
That’s why you shouldn’t wait until the creditor sends the debt collectors to you. Familiarize yourself with debt collection laws in New York to learn your rights and the legal actions you can take against debt collectors who overstep their mandates.
For instance, you can hire a lawyer for debt collection in New York to help you file a complaint with the Department of Consumer Affairs (DCA) against debt collectors.
How Do Debt Collectors Work?
Debt collectors specialize in collecting uncollectible debts on behalf of the original creditors, especially when you fail to follow the agreed repayment terms. Their main objective is to recover as much of the overdue debt as possible.
So, they resort to using unorthodox methods of recovering the debt, including harassing you with incessant phone calls, threats, and legal action. They’re usually paid according to the amount of overdue debt they’re able to recoup.
In Closing
Debt buyers will pay the unpaid amount to your creditor and then pursue you vehemently for the full amount you owe. This is why you shouldn’t wait for your debt to be sold. Additionally, creditors tend to be more considerate and lenient with lenders. They’re willing to negotiate with you for better repayment terms and an extended repayment period.
Of course, you can seek advice from a reliable credit repair company on how to deal with debt collectors. The Phenix Group is ready to help!