It’s important to avoid getting into debt if possible because it can be a troublesome situation to face.
With the rise of millennials in the workforce and the prevalence of student loans in discussions today, people are becoming more conscious of their debt situations. While debt has always been around, there seems to be a heightened awareness of its implications, possibly due to the influence of social media. Managing your finances wisely and being responsible can help you handle debt effectively in most cases. However, what happens when debt becomes a long-term issue that is hard to shake off?
When a debt goes unpaid for a significant period, the creditor might hand it over to a collection agency. Contrary to popular belief fueled by movies and TV shows, collection agencies are not likely to resort to extreme measures like breaking into your home or causing harm. Instead, you can expect persistent phone calls and, in some cases, visits to your home to ask for payment. There might be room for negotiation to create a payment plan that suits both parties. But if no agreement is reached, there is a risk of losing possessions like your car as collateral.
The longer the debt remains unresolved, the more aggressive the collection agency’s tactics may become, based on the debt amount involved. For a small debt, you might receive occasional reminders, while a larger debt could lead to a lawsuit either from the collection agency or the original creditor. Dealing with debt collection is a challenging and exhausting process that can also have a detrimental effect on your credit score.
