It’s time we did this – we’re going to expose Collection Agencies and their means of Debt Settlement in Australia. We’ll show our community here everything you need to know.
How it works
Collection agencies purchase debts from creditors that are unable to collect them. Most banks simply don’t have the resources to do debt recovery, and also want to maintain their high reputation.
Debt collectors are masters of tracking down individuals and making them pay up their money. Often collection agencies like to go towards settlement agreements.
Fact: Debt collectors have purchased your debt for pennies on the dollar. $10,000 loan? They’ve probably paid between $2,000 and $6,000. Now they’re looking for their profit. That’s you and the settlement agreement.
It’s really important that you understand what this entails. We can actually help you get a much better deal, depending on your situation.
Your credit score WON’T improve
If you’re thinking that if you go with this settlement agreement, then you won’t get a clean credit score. They’re not interested in helping you. Your account will be reported as “settled” but with a red mark. It could last for years!
We can help you avoid this. Speak to us, and remember that your credit file is EVERYTHING for your future. Don’t ruin it.
Collection accounts are measured identically whether they’ve been paid in full or settled. Sure – you might look slightly better if you’ve paid in full, but it won’t be perfect. Let us help you sort it out.
Your future can be really affected. Having a collection agency with their note on your credit file is seen as a bad thing by all banks. They’ll really consider this in the future if you apply for another loan.
Debt settlements and the law
Even if you’ve agreed to a settlement, you might be still open to a lawsuit. Yes, these guys might appear to be your friend, but really they want your money. They want it bad!
This is especially the case if you miss a payment. It could very well land you in court. That said, this is an unlikely scenario, but we’ve heard of some rogue debt collectors out there still taking debtors to court!
Collection agencies sell debt
Any unpaid balances can be sold between debt collectors. Some of them are fed up with chasing you, and will sell your ‘debt’ to someone else so they can move on to chasing other people.
This adds more interest on to the existing debt. It’s likely to be much more than before. It’s simply easier to sort things out before they snowball like this. I’ve helped many people fix their leaky financial affairs.
Plus, you might not know straight away that the debt has been transferred. These collection agencies are often quite slow to tell you. If your phone hasn’t been ringing for a few weeks, then your debt could be in the process of selling to another collection agency.
They need real proof!
Under Australian law, you have the right to request proof that you owe any debts to collection agencies. Further still, there’s no time limit on this debt validation. If they don’t provide that information, then any further collection strategies that they try are simply illegal.
Often they’ll mail you (physical address or email) a printout that somehow shows that you owe such a debt. In some cases it may be considered sufficient, and in other cases it simply isn’t enough proof. Our very well trained Australian team can evaluate these documents for you.
Basically – all collection agencies in Australia MUST posses a copy of the documentation you originally signed. Otherwise, their claims in court won’t be upheld. This falls under the rules of legitimate proof.
Avoid verbal settlements
It’s easy to speak to collection agencies face to face or over the phone. But you might be surprised to learn the truth! This simply isn’t legally binding, and you are likely to be worse off in the long run.
There are things you can do verbally such as:
- Asking for a discount on the whole debt amount
- Modifying the repayment schedule to fit your needs
- Negotiating to have no reporting on your credit file
- Demanding that ALL interest charges stop accumulating
This forms part of the negotiation stage. Until it’s physically in writing, then it’s not real. The great news is that we can talk to them for you, so you don’t have to. Often we will get you a better deal too!
Terms of the settlement offer need to be written in pen and paper. Also, it needs to be signed by both parties, with each having a copy. It’s vitally important that you stick to your payment schedule each month for the life of this loan, otherwise further charges could be present.
Talk with us
We’re really cool and happy people! Every week we speak to people like you. It’s not embarrassing. You have a voice, and we understand your needs.
Avoid the courts. No more phone calls. The letters in the mail will stop. We have found the solution!
Let’s us help you win. Simply get in touch to see if we can help you out today if the collection agencies are chasing you.