Ignoring a Debt Can Wreak Havoc on Your Life

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August 8, 2017 | By RGR Marketing Blog

4 Ways Ignoring Debt Can Affect Your Client’s Life and What to Do About It

Credit can be both a blessing and a curse. You need it to qualify for future borrowing purposes, but if a person takes on too much, the debt will accumulate very quickly and they could find themselves in a crisis. There’s a very fine line one has to balance on when it comes to building and maintaining one’s credit, and one such factor is – a person has to use credit in order to build credit.

Although the number of business bankruptcy filings has dropped significantly from 60,837 in 2009 to 24,114 in 2016, the truth is that a lot of companies are still carrying a high amount of debt – debt that can quickly turn against them should they make just one bad decision.

If a company or individual that you represent as a debt settlement specialist is drowning in debt, the last thing they want to do is ignore it, because it will come back to haunt them. Here are four ways ignoring a debt will wreak havoc on a person’s life and ways to help them prevent it from coming to that.

#1: Your Client’s Debt Will Grow Larger

Counsel your clients that ignoring a debt doesn’t mean that your debt is going to remain stationary. The interest will continue to collect on the amount they owe and the more they owe, the more interest they will be charged. This can quickly compound the debt within just a few months. In addition, if their account is sent to a debt collection agency, they’ll also be on the hook for any collection costs.

#2: Your Client’s Credit Will Continue to Get Worse

The long your client’s debts go unpaid, the more they will continue to damage their business’s credit rating. In some cases, even their personal credit could be impacted. By continuing to ignore a debt, the likelihood that the account will be sold to a collection agency grows. Once this happens, their score will be seriously damaged and the negative information will remain on their account for up to seven years.

#3: Their Account May Be Sent to Multiple Collection Agencies

If your client thinks they can wait out the collection agency, assuming they will eventually give up, think again. Collections agencies frequently sell off accounts to other agencies. When this occurs, the calls, emails, and letters start anew.

#4: Your Client Could Be Sued

If your client chooses to continue ignoring the collection agency’s attempts to communicate, they may leave the agency with no other option but to sue them. Should the agency’s lawsuit be awarded in court, a judgment will entered against your client. With the court judgment, the collection agency may then decide to garnish your client’s wages and/or even go after their bank account.

What Your Client Can Do When They’re Facing Excess Debt

Even though they may not want to do it, they must start answering their creditors’ calls. Before they do, however, they should be aware that the creditor on the phone doesn’t want to hear the entire string of events that caused them to fall behind. If a hardship was the cause, they should simply explain what happened and that they want to try to get caught back up. Keep their end of the conversation short, sweet, and to the point.

They will also want to look over their budget so you know exactly how much they can afford to pay the creditors. Make sure they can afford it before they make an offer. If possible, try to get the creditor to agree to a debt settlement number. This will eliminate their debt quickly and easily.

It can be easy to lose one’s temper with the creditor, but never do this. Getting angry will not help their case. If the creditor is speaking to your client in an aggressive tone, you should tell them to say that they don’t have time to speak with him or her and that they will talk with them at a later time, then hang up the phone. When the creditor calls later, inform them at the start that your client is going to record the conversation and this will usually force the caller to speak more respectfully.

If the creditor tells your client that they will be sued if they don’t pay or they will lose their property, tell your client to ask them directly, “When will I be notified of the lawsuit?” or “When will the money be taken from my bank account or my property seized?” Make sure they ask for specifics. In some states, these types of threats are illegal, so the more information your client has, the stronger their case will be.

When discussing matters, they should always have a pen and notebook at the ready so they can write down any important notes. Any time they speak with a creditor, they need to take their name and write it down! This will be important to have should the creditor break the law at any time during the process.

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4 Ways Ignoring Debt Can Affect Your Client’s Life and What to Do About It

#1: Your Client’s Debt Will Grow Larger

#2: Your Client’s Credit Will Continue to Get Worse

#3: Their Account May Be Sent to Multiple Collection Agencies

#4: Your Client Could Be Sued

What Your Client Can Do When They’re Facing Excess Debt

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money today!

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4 Ways Ignoring Debt Can Affect Your Client’s Life and What to Do About It

#1: Your Client’s Debt Will Grow Larger

#2: Your Client’s Credit Will Continue to Get Worse

#3: Their Account May Be Sent to Multiple Collection Agencies

#4: Your Client Could Be Sued

What Your Client Can Do When They’re Facing Excess Debt

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