Debt collection is big business in this country. Unfortunately, people get in over their heads and find they cannot pay what they owe. When that happens, it is off to collection. Here’s the thing: unpaid debts don’t necessarily have to go to collection. They often do because debtors make the mistake of fighting creditors.
If you have received goods or services which were not gifted to you, and for which you have not paid, you owe a legitimate debt. There are laws that make allowances in cases of fraud or deceit, but such cases are the exception to the rule. Most of the debts that go to the collection every year are completely legitimate.
Do you have outstanding debts that you are struggling to pay? If so, it is worth your while to work something out with your creditors. On the other hand, ignoring your debts or attempting to fight them is foolish. You are probably not going to win. To drive home the point, here are five good reasons to not fight legitimate debts:
1. Collection Firms Are Annoying
First and foremost, fighting a creditor for too long could result in your debt being sent to a collection agency. Rest assured that collection firms are annoying. It is part of their job. They don’t get paid if they don’t collect, so they are going to be as annoying as they can be within the confines of federal and state laws. That is still annoying enough.
Along those same lines, it’s common practice for collection agencies to sell their accounts to other agencies. You could easily go from dealing with the original creditor to three or four collection agencies that purchase your debt in succession. Every party involved just adds to the annoyance.
2. Interest and Fees Will Mount
The amount you owe will automatically increase should your debt go-to collection. Why? Because the debt collection company needs to cover its costs and make a profit. In addition, interest will be added to your debt as time passes. Now, imagine what would happen if your debt were sold three times to different collection agencies. The fees and interest would just keep climbing higher.
3. You Could Wind up in Court
If you fight a legitimate debt for too long, you could actually wind up in court. You would then be facing the possibility of a judgment being entered against you. You definitely don’t want to go this route. A judgment adds to your debt by forcing you to pay the creditor’s attorney and court costs. And if you continue to fight, a judgment collection agency could be brought in by the creditor.
4. Assets Could Be Seized
If a judgment collection firm is brought in, your assets could be seized. According to Salt Lake City’s Judgment Collectors, this means your wages and bank account could be garnished. It means certain types of property could be seized and sold.
5. You Will Ruin Your Credit
While all of this is going on, your credit is being ruined. The outstanding debt has already been reported to all the major credit reporting agencies. If your case went to court, the judgment has also been reported. Even if you were to pay in full today, your credit would be tarnished for the next 7 to 10 years.
There are times when debts are not legitimate. They should be fought. But when debts are legitimate, it doesn’t make sense to fight them. You are better off working out a means to pay them rather than dealing with the consequences of collection efforts.
