In the age of uncertainties and financial intricacies, probably every household has held minimum or maximum debts and advanced money at some point. From these times, everyone has owed an overdue amount to someone else, resulting in the deeply embedded concept of debts. However, debt repayment comes with the essentials of social applications where money is to be returned through the principles of fairness and appreciation. On the other hand, the collection of debts has given rise to substantial financial challenges and burdened the already delicate financial system. Consequently, economic globalization, financial regulations, and tax laws have been introduced to scrutinize the debt regulation system. This concept establishes financial instruments in society, allowing banks and other interest-based companies to materialize. It should be noted that debt collection is not performed individually; most institutes acquire debt from large-scale and centralized developed platforms. Regardless, it is a bitter truth that debt is hardly remunerated, making it inescapable.
What does it mean to owe money?
To owe money means you are obligated to pay or repay in return for something received. Usually, people who owe money are obligated to pay or refund, for example, to owe the bank interest on a mortgage, to owe money to the bank, etc.
It is believed that almost all US households and family members are currently obligated to pay around $14.9 trillion reported in 2020. If this amount is broken down individually, each American resident owes approximately $92,727. Revolving these figures leads to confusion, allowing you to find an accurate scheme to analyze the previous balance. However, no formula is calculated precisely to assess the debt owed. Regardless, you can still get your head around the digits by doing a little financial exercise, checking the history of credit reports, comparing previous utility bills, and calling creditors.
How do I find the collection agency to which I owe money?
To determine which collection agency you owe money to, you must get your credit reports from US credit bureaus: Experian, Equifax, and TransUnion. In addition, you need to check your voicemail, caller ID, and all letters and phone calls because the creditor may have tried to reach you in the past.
How do you get a list of creditors?
To get a list of creditors, you must get your credit reports from US credit bureaus: Experian, Equifax, and TransUnion. Creditors’ details are found in one of these three major credit bureaus. If you are outside the US, try to find domestic credit bureaus.
Suppose you want to determine the balance amount you owe in that case. In that case, you need to process it by examining your credit repSignificantficant credit apps such as Experian, TransUnion, and E can access the credit report Equifax. Creditors primarily document accounts to credit hubs or bureaus responsible for adding them to the credit report they should maintain. You will encounter account types mentioned on the credit reports, including credit cards, personal debts, mortgages, and other loans. The credit report list will directly display pending money on every account.
Furthermore, the credit report will also outline the payments’ history and current status. You will also receive the creditor’s contact information, used to monitor to monitor the debt situation. The credit report is provided to the household annually as prescribed by federal law. You can visit the annualcreditreport.com and access the free Experian credit report at any time of the year. However, these three credit platforms provide free services to explore debt collection by April 20, 2022. The monthly credit reports, free of cost, will be available on annualcreditreport.com
Having access to a credit report directly reveals the pending debt. Despite this, the creditor may not share account information with the credit platforms. This situation arises if lenders document account activity with credit apps even though they are not supposed to.
Can collection agencies charge more than you owe?
Yes, collection agencies can charge more than you owe, but they can only charge fees and interest based on your original agreement. Usually, collection agencies will add additional credit interest and collection effort fees to the final balance.
How do you check the debt review status?
To check debt review status, go to the websites of the major credit bureaus, such as Experian, Equifax, and TransUnion. You can check debt for free once per year.
On the credit report, fill out the personal information and debt collection insights accurately. The credit report does not summarize all debts isolated through closed accounts before ten years. The old debts and the preceding history of loans may appear on the original credit reports, but they are automatically cast off after ten years. Accounts are deferred because late payments are also removed after seven years. The credit report also highlights certain exceptions regarding the types of debt. This includes, for example, medical debt, which is mostly not found on credit reports unless they are due way past the deadline and mentioned under the collection account.
Similarly, retail payment plans that are not reported to the credit bureau are also not highlighted. Therefore, in most scenarios, you will only see your account on the credit report if the creditor documents it and sends it to the debt collection agency. However, if the credit report has not outlined any pending debt, you can go through your earlier utility bills and contact the creditors to determine the amount you owe.
How do you clear debt after finding them?
- Collect your debt: You must create a comprehensive list comprising existing and general obligations. Credit cards, student loans, personal loans, cars, and mortgages can be included. With each category, highlight the details of the individual you owe money to, the exact amount you owe, the interest rate, and the monthly payment if necessary.
- Pay according to the priority level: By the time the list has been created, you may have an idea of an exceedingly prioritized debt amount that tops the priority level compared to the other amounts. This amount should be paid first, followed by the less significant sum. Therefore, consider paying off that urgent amount that needs to be delivered without further delay.
- Establish a budget: Thoroughly analyze your monthly income and compare it with your expenses to set realistic financial goals. This will help you draft a clear and precise budget to pay off your debts wisely and quickly.
- Select a payoff method: Currently, there are two methods known as debt avalanche and debt snowball. The former involves getting out of the debt amount with the maximum interest rate and then paying off the debt with the second-highest interest rate. The latter prioritizes the debt with the lowest interest rate before the next one. These methods are applicable to credit card debt, as such methods can help you prioritize and talk to text.
After analyzing your credit accounts, if you find out that your debt has already reached collections, you need to embark on a new prioritizing journey. It would help if you addressed the matter seriously.
You can make phone calls and politely request that the debt collector temporarily suspend communication. You can also negotiate with a debt collector and ask if they would settle for a lump sum amount less than that vast amount. You can also ask for monetary assistance from a nonprofit credit counseling platform. Lastly, you have the option to hire an attorney if the situation becomes out of control.
After leaving Wells Fargo Bank in 2014, Daniel began a career as a finance consultant, advising companies and individuals on economic policy, labor relations, and financial management.
At Promtfinance.com, Daniel writes about personal finance topics, value estimation, budgeting strategies, retirement planning, and portfolio diversification.
Read more on Daniel Smith's biography page.
Contact Daniel: daniel@promtfinance.com