Creditor Harassment and Debt Settlement - How To Prevent Creditor Harassment

One of the worst aspects of being in debt is the seemingly endless calls from creditors trying to get money out of you.  It is the nature of the calls that is one of the most stressful factors.  People are often angry that they have not been paid, so can be rude and even threatening at times.  When you simply do not have the money to pay your creditors what you owe them, you are left in a very difficult situation because all they want to hear is how you are going to give them their money.

Debt collection agencies are often used by creditors to collect debts, and some of these organisations do have a reputation for being a little over enthusiastic when it comes to finding ways to squeeze money out of people.  They often work on a commission only basis so their incentive is that if they do not collect on the debt they do not get paid.  That is quite an incentive and has led to some bad practices by a few agencies.

The only way to stop creditor harassment is to take action to settle the debt.  Creditors will not go away if you try to ignore their calls, but they will stop chasing you if they know you are actively engaged in a process that will allow you to repay your debt.  If you engage with your creditors and let them know exactly what your circumstances are they are likely to be more understanding.  If they see that you are seeking expert help in order to tackle your debt, there is a greater chance that they will be open to negotiation in terms of finding a way forward.

There are several possible ways to deal with consumer debt problems, and the best one for you will depend on how much you owe, how many creditors you have, what kind of debt it is, etc.  Debt management plans are used a lot by people with fairly serious debts who have a decent income that can be used to make regular payments to a debt plan.  For those people whose situation is worse than this, perhaps struggling to keep up with payments on large amounts of debt, the best answer is probably debt settlement.

Debt settlement is sometimes the only way to deal with very serious debt because it involves actually writing off a large part of it.  Instead of just working out how to repay the full debt in a different way, debt settlement is about negotiating a large reduction on the total amount owed, in exchange for settling the rest of the debt quickly.

Creditor harassment stops when you start debt settlement because the debt settlement company deal with your creditors for you.  All you do is make a monthly payment into a separate fund where your money is left to grow.  When a settlement agreement is reached with a creditor this pot of money is used to make the payment to them.

For UK residents, debt settlement is not something generally available, because there is another solution introduced by the government which fulfils the same function.  An IVA is a formal arrangement that involves you making a fixed monthly payment for the duration of the IVA (usually up to five years).  At the end of the agreement any remaining debts get written off, which can mean wiping out a substantial chunk of debt.

If you decide to use debt settlement or an IVA to put an end to creditor harassment you will need to carefully select a good company to work on your behalf.  It is important to be careful about choosing a well respected and proven company as there are quite a few out there now that cannot be relied on to actually improve your situation.  To be sure of using a good company just follow advice for recommended companies and apply to as many as you like before deciding which is best for you.