If your account has yet to be turned over to a collection agency theres still time to make the best with the original creditor. Original creditors have their own in house collection efforts but usually after 4 months, the account will be turned over to a third party debt collector.

If you have issues with the account, its best not to hide and hope for the best. You can negotiate with the original creditor to avoid the account being turned over to a collection agency.

Communication is key. The OC is not going to go away. They aren’t simply going to wipe away your balance because you’re hiding. You need to call them and explain your situation.

During these difficult times with our economy, OC are bending more and more. Where they used to refuse specialized payment terms and negotiating credit ratings, they now realize it’s in their best interest to work with you.

OC response varies from creditor to creditor but the simplest way to know where you stand is to pick up the phone and get a hold of your account manager. Everyone is hurting right now, people have lost their jobs all across the country so this needs to be relayed to your creditor.

Explaining your situation will get the ball rolling on working together. The OC may agree to cease late fees and put you on a payment plan to  help you temporarily. They understand that you have the right to file for bankruptcy or go into a credit counseling program so they are willing to help the majority of the time.

By contacting the OC you may be able to stop the collection process. They may agree to freeze the account or even lower your interest to make the debt affordable. They want to be paid and they also want to hold onto the debt if possible. It costs money to give the debt to a collection agency.

If the debt is secured such as a mortgage or auto loan, the options may be more limited but banks are doing loan modifications right now on secured loans, so make the effort to see what can be done. If the debt is unsecured like credit card debt, the creditor knows they have  no collateral on the loan so they will be more flexible in working with you.

You may be able to set up a 12 to 24 month plan with them for reduced interest, no late fees and smaller payments in addition to avoiding the dreaded turn over to a collection agency.

The OC may also be more willing to freeze the reporting to the credit bueaus while your on a modified plan. Your credit rating is an important part of the negotiation process to keep in mind. Again, it cant hurt to ask.