by Dawn Hawkins

Created on: May 15, 2009

It's easy to find yourself in debt when you aren't paying attention to your finances. There are many steps that your creditors will go through in order to collect the money that you owe them. One of the final steps is to send out a collection letter. The first letter is usually a reminder that you owe the money and you are late with the payment. After that, it gets far more serious.

It is urgent that you take action now so that you don't end up with a bad credit rating later. Many aspects of your life depend on a good credit score. Such things as obtaining a loan, getting a job or car insurance rates will all be determined by what is reported on your credit. It takes years to move past these issues.

Here is what you should do when you receive a debt collection letter:

Read

You should read the letter very carefully. Know who is sending it to you and what the debt is for. It is possible that you don't owe the money at all. In these cases, it is still important to make contact. Creditors won't go away unless they are sure that your bill is paid.

Contact

Every collection letter comes with contact information. Do not throw the letter in the trash or ignore it. You may not recognize the name of the company sending you the letter. This is probably because the original company has either sold your debt or are paying an agency to collect if for them.

Making immediate contact to resolve the issues is your best chance of clearing it up. Even if you don't have the money right away, you should still make contact. If you have already paid the bill off, call anyway. Have any proof of payment ready so that you can give the information to the person you are talking to.

Make Payment Arrangements

If the bill isn't paid, it needs to be. If you do not find a way to get it paid off, it will follow you for the rest of your life. Even if you move someplace else, it may take time, but they will find you. Don't think that you can run from your debts. Set up payments with the collection agency that you can afford to make. If the company refuses to allow you to make payments, take heart. There is a way around this and there is nothing that the agency can do about it.

Be Kind

Don't be rude to the person that you are talking to. This can be a little difficult at times but it is important that you don't let them get to you. Collection agents are trained to be mean. They will say things to you that they shouldn't say

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