Debt Collection Process

debt collections process…best way to proceed.?

last year, i became ill which lasted for a little over a year. being a freelancer, this meant i was not able to work and draw an income as well as being unable to just deal with the everyday things, including working things out with creditors. as a result, i couldn't pay unsecured debt and/or credit card bills (about $45K). when i recovered and was able to work again, my unsecured debt had gone into debt collection. in the past month or so, i have started getting calls from what appear to be law offices in regard to the debt. i'd like to know what the next steps will be in the debt collection process and what my best course of action would be in trying to resolve the debt. i have been paying all my bills (mortgage, car, utilities, equity loan) except for what's gone into collection—barely—and can't see being able to make other payments till i get a job at my level in my industry (which will take some time given the recession). how does—and how long—will this affect my credit rating?

Public Comments

1. Based on the debt that you have I would say that a credit counseling service would suit you best. Although this will hurt your credit for probably 5-7 years it will allow you to negotiate the debt with your creditors and pay it off in a reasonable amount of time. Try searching online for credit counseling services. http://www.anewhorizon.com seems to get good reviews.
2. Here are your options! Do nothing! This is actually one of the option alot of people try doing and finally put themself into deeper problem. You will eventually start getting calls from collection agencies and they will offer you settlement of around 50 to 70% meaning you will have to pay around 60% back in 1 payment which is not easy... Debt Consolidation Debt consolidation loan will help you to consolidation all your debts into 1 and you will start making 1 payment every month and they will start paying your creditor. This is something which will lower your interest rate but you need to understand debt consolidation will not do anything good to the principle amount. Bankruptcy Filing for a bankruptcy is another option but i am sure you understand you don't want this because this will stay on your credit report forever. This takes control out of your hands for more than 7 years and you still make monthly payments, so lets forget about this for now CCCS - Credit counseling program CCC organizations are usually designated as non-profits by the IRS, although many of these firms recently lost that status because the IRS felt that had "for profit" motives. These organizations combine your payments to one monthly payment, where you pay back all of the principal, some interest and some fees. Many CCC organizations receive funding from creditors as well as payment from their clients. Many times these programs are generally drawn out over four to six years and less than one out of four actually complete the program. Many times these payments are higher than the original credit card payments and this program can have a non flattering affect on your credit. So here is what you need! Debt Settlement Debt settlement or debt arbitration is a legal process used by both people in debt and their creditors to negotiate a settlement of an existing legal debt. This proactive approach is the most cost-effective option to pay off your current debt while avoiding the negative effects of bankruptcy. Any person owing credit card debt, or any other debt, has the legal right to contact and negotiate with the creditors. This practice however, takes time to master and certain skills to get the maximum benefits. The Debt Settlement Company works diligently and professionally with your creditors on your behalf to reduce your current unsecured debt balances down 40-60% by arbitrating an agreed settlement amount with your creditors. Me & wife were in the same problem around a year back and we went with this debt settlement company. They reduced our debts down to 48% and obviously that was a big Relief... I like talking good about this company! Debt Care USA 866-534-0754
3. Try using: http://DebtAnswersNow.com I used their service a couple months back and they consolidated all my debt and lowered my total debt about 25%.
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5. Debt Care USA is OK if you don't mind a company that has unresolved issues with the BBB. The answers were right about your different credit options. Please contact me if you would like to know more.
6. I'd contact a debt professional. The guys at http://debtconsolidationloans.eoltt.com helped me out a lot. Their free debt consultation was more than sufficient to help me start solving my debt problems.