Have you defaulted on your student loan? Well, if yes then, brace up to expect a call from the debt collectors anytime soon. Yes, the department of Education of the Federal Government has duly hired a number of collection agencies endowing them with the task of loan recovery. Intimidating it might get, but prevention won’t save you from the plight. Therefore, hiding from debt collectors is certainly, not a solution that would work magic for you. Rather, handling the issue from the front might help you break the jinx.
Now, before you take to facing them with a headstrong attitude, here is a look at some pointers that you must remember to ensure a smooth deal with the debt collectors.
- Know your rights –
Being a defaulter is never equal to being a criminal. Therefore, if a debt collector poses such behavior towards you then, always know that the Fair Debt Collection Practices Act is just by your side. The act has been exclusively designed to protect the consumers from debt collection harassment and it poses certain restrictions on the debt collector like calling prior to 8 a.m. and 9 p.m., using abusive means, threatening, divulging information, representing them, and so on.
- Always be Open to Talks
Avoiding a call or notice from the debt collector is equal to inviting risks on your own, as it offers them a platform for filing a lawsuit against you. Always pick up their calls, and if required schedule a meeting with the collector and address the notice stating the bill amount and the lender’s name. In case, you find yourself to be free of such debts then, send a written notice to the collector informing about the same within one month of receiving the notice.
- Document the Meeting
While you are in a meeting with the debt collector, never forget to take notes of everything they say. If possible then, record the conversation with due permission of the collector. Also, remember to keep a note of the time and date of the call and the name of the representative.
- Negotiate with Debt
In case, you find yourself owing the debt then, contact your lender immediately and explain your financial condition to them alongside stating the reason for not being able to pay off the debt. Have an open talk with the lender and request a payment plan for him or if possible, to forgive some amount from the debt though, the latter option might get difficult.
- Get a Written Notice
Once, you have convinced your lender or the debt collector with an alternative repayment plan favoring your financial condition, always ensure getting the notice in writing. Either get your lender to send you a notice on their letterhead or get it written to be duly signed by them. If you start paying a settlement, prior to having a written notice then, remember the bargaining power is completely lost., as the debt collectors might anytime get back to you stating that there wasn’t ever any settling between you two.
Defaulted student loans are certainly, harassing, but following the steps well ensures better handling with the debt collectors.