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If you have a debt that you cannot resolve quickly, you might find that your account has been transferred away from the company with which you do business. After a few months, most companies will transfer the debt over to a collections agency, a business that specializes in recouping lost money. These agencies can have a major impact on your life, and it’s important to understand the consequences of getting into this kind of debt. The problems you’ll face may be different than what you expect, as is the long-term damage caused by going to collections.

The Phone Calls Begin

Debt collectors will begin to contact you to get payment shortly after your account goes into collections. According to the Federal Trade Commission, the collectors have several avenues through which they may contact you. Most contact their debtors through mail first and then through phone calls. While the collectors are not allowed to call you at inopportune hours or at work, the calls can represent a very high level of stress for many. The calls themselves are rarely pleasant, even if the collector does follow the rules.

Phone calls from debt collectors are generally allowable from around eight in the morning until nine at night. The calls can interrupt family functions and place stress on those who can’t immediately respond. Unfortunately, this is both completely legal and something on which the collectors count. This helps put pressure on debtors to convince them to pay.

Credit Score Drop

Accordring to the FTC, accounts in collection are one of the major factors that will determine your credit score. Having an account go to a collections agency means that you’ve not only failed to pay off a debt, but that the debt has been delinquent so long that the original holder of the debt was forced to sell it off in order to recoup its profits. This, in turn, means that most lenders are going to be very wary of lending you money. While there may be good reasons behind your failure to pay, these issues don’t show up on paper.

Your credit score is presents the greatest point of leverage the collectiosn agency has over you. When you go into collections, you’ll be cut off from many avenues that would improve your life. It is more difficult, for example, to borrow money to buy a house or a car. It may also be more difficult to move into a rental unit, as many landlords now require a minimum credit score for new tenants. Unfortunately, the damage done to your credit score by an account in collections can last for years, and you may well have to deal with it long after you have paid off your debts.

Eventual Court Date

Finally, you’ll find yourself with a court date if you are not able to settle your account with the collections company. While most collections companies are fairly willing to work with debtors in order to resolve a debt with some kind of payment, they’re very tenacious when it comes to making sure they get their money. Remember, these companies are unlikely to pass the debt further down the line – if they don’t collect, they have lost money. As such, it’s entirely possible that the collections company will bring a lawsuit against you in order to recover its money. This, in turn, can lead to issues like wage garnishment if you are not able to pay on the court date. While frightening, this is also a realistic problem that impacts many people who have an account go into collections.

The collections process is something that can have many negative impacts on the life of a consumer. If you experience an account going to collections, it’s best to try to resolve the matter as quickly as possible. Working with a credit repair service may allow you to set up payments in a manner that works for you and eventually allow you to pay off the debt on your terms. Going to collections is not an ideal circumstance for anyone, but it may be the only way you will be able to pay off your debts on a schedule that works for you.