If you owe money but have not been keeping up with the payments, there is a good chance your debt will be sent to a collection agency. When this happens, you will get lots of calls and veiled threats from the agency demanding that you pay off all of the debt to them. However, simply paying these agencies is not always the simple solution that it makes itself out to be. There are actually a few options for you, including an option to file what is known as a consumer proposal, or a bankruptcy. These options may help you alleviate some of your debt.
There are some situations where paying the collection agency is not the best idea for your debt solutions. Here are some of the reasons why.
The main reason you may not want to pay a debt collector is that once it is sent to a collections agency, it has already been reported to major credit bureaus. This means that your credit rating has already been impacted by this debt and paying the agency will not change any of this. Instead, you may want to file a consumer proposal in order to reduce the amount of debt and make laying it off to the collection agency a lot easier.
While there are downsides to not paying off those debts, you should not rush to paying it off before looking at all options available to you, because the damage to your credit score has already been done and it will take 6 years from payment to have that removed from your credit score.
Check Out All Options
While you may be getting calls from collections agencies, you should not feel pressured into paying off these debts until you have searched out all options available to you for reducing these debts.
This post was written by Trey Wright, one of the best bankruptcy lawyers in Tallahassee FL! Trey is one of the founding partners of Bruner Wright, P.A. Attorneys at Law, which specializes in areas related to bankruptcy law, estate planning, and business litigation.
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