Debt collection or debt recovery is a method that creditors employ in attempts to recover money due from unpaid loans extended to borrowers. A collection service is typically hired primarily to be persistent in collecting the funds on behalf of the debtors.
Whether you are a debtor trying to collect or a delinquent borrower being harassed by collection companies, the legal experts at Rainey Collins Lawyers say that you can benefit from the services of a debt recovery lawyer.
Debt Recovery and Your Credit
If a debt recovery service contacts you, it most likely means that on record, you have a delinquent loan or you have defaulted on your payments. These delinquencies appear on your credit report and adversely affect your credit score. Your future loan applications may be denied outright because of your bad record.
The process of debt recovery involves a few steps. These include being contacted by a collection agent. Unpaid debts can lead to tricky situations that may be difficult to deal with on your own. Working with a lawyer may be a good move to make sure that your rights are protected from debt recovery practices that could border on harassment.
The Process of Debt Collection
Once you default on a loan, usually for one to three months, the lender may request a debt collection company to handle your delinquent account. Your personal information, as well as details of the loan agreement, will be sent along with the request for collection.
After the debt collection service reviews and accepts the claim, the entire process of debt recovery starts. A demand letter is first sent to the borrower, with the acknowledgement receipt sent to the creditor.
As a borrower, even if you have been in default, you still have rights that need protection. If you feel that you are being harassed by collection agents, you can seek the help of a debt recovery attorney.