No one wants to piggy back on their parents for too long. This is why taking a loan for education is a good idea. Most higher education courses are expensive and parents may not always want to shell out for it. Plus, who doesn’t want to be independent financially!
However, the downside is that you maybe bogged down with tremendous debt that can drag on even after you start a family. That’s every student’s worst nightmare!
Defaulting on your loans when you’re still trying to complete your education can be a hassle. Soon enough a collection agency will start demanding you pay back the creditor.So, how do you deal with collection agencies when you’re a student?
Stop the Harassment
Many collection agencies use strong arm tactics to get defaulters to pay. This means you may be getting calls from them frequently, as many as ten times in a day. However, there are rules for when a collection agency can contact you. They can’t call you more than three times during a week and they can only call between 7:00 am and 10:00 pm.
You can threaten them with filling a complaint to the consumer forum.
Double Check the Debt is Yours
Collection agencies are lazy and it is not unheard of for them to mix up debt. So make sure the debt belongs to you. Ask the collection agency to confirm before they call you again. You should also go through your financial documents and find out what debts you have.
You should also double check the debt amount. Don’t be surprised if the collection agency has increased it. In such a situation, ask them to provide documents proving that you owe that amount.
You’re Being Threatened to be Sued
After a lot of harassment, a collection agency may threaten to sue you for not paying the student loan. You could even receive letters or court orders. Don’t panic!
It’s probably a threat. What you need to do is get in touch with a debt specialist. It’s obvious the collection agency is trying to throw its weight around and arm twist you. Because of your debt, you are vulnerable and a debt specialist will be able to best strengthen your position.
A collection agency has grounds to sue a student, if they have documented that they took all the steps to arrange the payment and you didn’t cooperate.
A Repayment Plan
Eventually, you will have to sit down with the collection agency and agree on a repayment plan. Take stock of your own financial situation before you go in for the meeting. Negotiating a repayment plan is tough. From the time you were contacted by the collection agency, try to improve your credit score. This shows that you are in a better position to pay back the debt. Do not agree to a plan which you can’t afford, doesn’t fit your financial situation or you don’t like. In the end, you should walk out of the meeting with a repayment plan that satisfy you. Taking a debt specialist to the negotiation would be a good idea as they can best present your case and get a good deal.
So next time a collection agency contacts you, weigh your options carefully and don’t give in!
