Getting out of debt is hard if you don’t have the money, we all know that and when it comes down to dealing with debt collectors, it can be awfully hard.  When trying to deal with the collection agencies, you have to act like you mean business and don’t let them walk all over you.  Writing a letter alone can prevent you from getting your wages garnished or having you show up in court.

There are usually a handful of letters you can write.  These will include responding to a debt collector when they send you something in the mail and by writing to them directly.  Whether you want to negotiate your bill or ask them simple questions, a letter is still one of the best ways to communicate since they will take it more seriously than an e-mail or phone call.  It also gives you a piece of evidence as well if something happens in the near future.

How to write the letter

Writing a letter to a debt collection agency is really no different that when you write to your Grandma or any other relative.  You’ll want to have your letter look something along the lines of this –

[collection agency name]
[address]

[your name]
[account number / reference, etc]
[your address]

To whom it may concern:

Here, you’ll write how you’re having difficulties paying your bills but you’re willing to pay them.  Tell them what you’re willing to pay and how much of the bill you’ll pay so that they can report “paid in full” to the reporting agencies.

Ask them to review it and have them return it to you.  When you write this letter, make sure you write something that you can live up to.  Never lie and tell them you can pay $5,000 in 30 days if you can’t because this is going to get your into more trouble.

At the end of the letter, sign your name along with a section for the creditor to sign off as well telling you they agree that you pay X amount in X amount of days, etc.

There are some great sources online as well if you want a full example on how to write a debt letter.  Here are some links that you can hopefully use for your own personal use:

• Bankrate.com debt letters
• Free letters from Debt-n-Credit

Try these 2 sites above as they will give you a few examples.  Take your time when writing these out and always send it via certified mail and make a copy for yourself.  You’ll always want as much evidence as possible when it comes down to writing a debt letter.

I get e-mails here once in and awhile and while I advise that you consult with an attorney or get legal help when it comes to your debt, I can hopefully help you walk in the right direction.  I received a question the other day about a debt judgement and I thought I’d do my best to answer it.

Q:  Hi, I recently had a credit card account that was in collection.  I owed around $7,000 and the collection agency said we could settle with $3,500 if paid off in full.  Right now, I don’t have the full $3,500.  I would only be able to pay $2,000 or so.  They won’t accept monthly payments on this? What will happen?

A:  Well, it sounds like you took the first step and negoiated with the collection agency, which is a good thing and I think many people should learn from this because many just pay the full balance over time and plus some.  I just wanted to say you’re on the right path at least.

Since it sounds like the credit card company sounds like they will settle on 50 cents on the dollar (this is the industry standard it seems), it sounds like you could potentially tell them what you can pay in full.  You mentioned you have around $2,000.  Call them back up and tell them this.  Tell them that you can’t afford the $3,500 and you’re willing to give them $2,000 in full by the end of the day tomorrow.  The worst thing they can say is NO.

If this doesn’t follow through though, the company is more than likely going to file a judgement on you and they have every right and let me tell you why.  When you signed up for your credit card, you are allowing them to sue you in court to collect the money that is due and this is exactly what they are doing.  They are a business and they would rather get a few dollars rather than nothing.

If you receive a notice from an attorney, make sure you respond to this, it’s important!  Never ever ignore something like this and instead, call up the collector and work something out.  If you’re willing to pay, they will do something for you.  Tell them you want the 50 cent on the dollar but can only pay $500 every month.  They may take this, they may not, it’s all up to you.

If this fails, you may have to show up in court.  The worst thing you can do is NOT show up.  Please, if you can take any advice, SHOW UP in court and if you don’t, you’re just hurting yourself even more.  When you show up, be honest and tell the judge that you’re willing to work with them.   Tell the judge you’re more than willing to work something out and tell the court that you have tried but they won’t follow through on it.  Providing this alone can save you from more legal battles.  This is why it’s essential to go.

If you fail to show up, the creditor can then garnish wages, put a lien on your property or home, take personal property or whatever they have to do.  This is why you need to go to the court to get things worked out, it will only harm you more.

If you’re getting threatened to have a debt judgement thrown at you, try everything in your own power to get them to work with you.  Try and figure out some sort of payment plan that you can work out.  This will be the best thing that you can do rather than ignore them.  As long as you don’t ignore, you should be fine with the entire process.

You always hear about the government helping out those in need and they try to do a good job at it.  The problem with government funding is that it’s so confusing and many people have no idea on where to start or even get these funds.  I’m going to show you a few tips that you can use to hopefully get yourself on the right track to help you with paying off your debts.

Check with your local community

I don’t know what kind of situation you’re in but you may want to check with local communities in your area.  Check with your local churches or even walk into your local government office.  Many people are more than willing to help and they are going to point you in the right direction.

Research local organizations

This one kind of ties in with the first one but explore what your community has to offer.  Whether you’re in need of a home, diapers or something else in between, there are so many people out there that are ready and willing to help you out when you’re in need.  If you’re unsure of where to start, Google what you need plus your city and this should yield some results

Look into HUD

HUD (housing and urban development) is a great resource to use if you’re having problems with your housing.  HUD may be able to pay off some of your mortgages, rent or even place you in a temporary home while you get on your feet.  Keep in mind that there are certain qualifications to be approved for such assistance.  Refer to HUD.gov for more information.

Research grants online

Another great place to look when looking to get help is with government grants.  These grants are designed to help you out when it comes to getting the help you need.  With so many grants out there, it’s important that you don’t fall victim to a scam so it’s essential that you do your homework.

With so many people in need out there especially in this economy, you need to understand how to find help and where to get it.  There are people out there that want to scam even the people in need.  Check with your local chamber of commerce, church or anywhere else to find a place that can help you out.

When looking to get help with your debt, you may turn to a group or an organization that’s going to help you fight off your debt.  They are going to be able to give you advice on what you should and shouldn’t do.  Before you head out and figure out what debt group you should use, there are some things that you should follow to ensure that you’re getting the right place to work for you.

Check with the BBB

Before you work with anyone, whether it’s with your debt, installing a new deck, etc., you must check with the BBB to see what kind of rating they get from consumers like you and I.  The Better Business Bureau is going to be able to show you how many complains they have received as well as a grade that will show you what they think of them.  This grade alone will give you a better idea on if you should do business with them or not.

Meet with them in person

If possible, always try to meet with these people in person.  You’ll know right away who you’re working with just by walking into the office and talking with someone.   Are you walking into a shady room or are you walking into a nice complex?  This will give you a better idea on what the company is all about.  You’ll also feel more comfortable when it comes to talking and dealing with someone directly rather than over the phone.

Get everything in writing

No matter what the company tells you what they can do for you, make sure you always get this is writing and make sure they sign off on it.  You won’t want to look back in a few years and find out that they aren’t living up to their promises.  It’s always safe to get everything in some sort of writing that they are acknowledging  terms and conditions.

Debt groups is a great service that you can use to better understand your debt and how you can fix it.  Sure, you can get a lot of information online but it’s always best to consult with a professional when dealing with your finances.  Search your local yellow pages or ask friends and family if they can recommend someone for you.

Credit can seem like such a nuisance at times when you need it is not available and when you don’t need it all you get is marketing calls. You have a great job and a nice apartment but you would like to get a credit card. It seems that every time you want to take a trip you need a credit card in order to make reservations. It is impossible to get airline tickets, hotel room and other important things without a credit card. The problem you have no credit cards and you have no credit score. What can you do to secure a credit card?

That is the answer ‘secure’ a good credit card meaning get a secured credit card. A secured credit is normally the easiest credit card that you can obtain.  A secured credit card means that you put anywhere from $250 to $5,000 in a savings account from the bank that you plan on getting the credit card from. The bank holds your deposit as security for the credit card that has been issued to you. Even though it is your money you still may not use it as it security for the bank that you will pay on your credit.

Remember even though this is a secured credit card you are still borrowing money. You are responsible to repay the loan in accordance with the agreement. The agreement is what is very important to you. Make sure that you are not paying a high interest rate, large membership fee and yearly fee or most of your money will go for the expense of getting the secured credit card. You should try to find a lending institution that will start you off with 0% APR and no yearly fees. Also make sure that they will give you at least thirty day grace period on paying the loan back. You also need to make sure that they will report to the credit bureaus letting them know your credit history. This is what will help get you a good credit score.

After you have used the secured credit card for a while most lending institutions will then let you convert your card into a non secured credit card and upper your credit limit. This is good for your credit history but remember when you change your credit card that your initial agreement will change as well so make sure that you are getting a good deal on your new credit card.