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Debt Collection for Personal Debt

Mark Cappel
UpdatedSep 26, 2023
Key Takeaways:
  • A collection agent may appear at your door to attempt collections.
  • A process server is a more likely caller if you are in debt.
  • Negotiate an out-of-court settlement on the debt.
I am indebted to several credit card companies. How likely is it that a debt collector is trying to collect from me personally?

Is it possible for a collection agency to send someone to my place of residence to collect? I own a home-based business with a partner, and we have been hit hard by this recession, losing at least 80% of our business in the last two years. We're making just enough money to keep my business partner from being evicted (she isn't able to get help from her family) and to pay for food and medicine, but nothing else. I haven't been able to pay any of my credit card bills for almost a year, and I had to sell my house and am now living with my parents because I have no money. The creditors continue to call and mail me collection notices, and I've already sent them letters describing my current situation. Our business may pick up soon, but I can't guarantee anything until we receive client checks, and even our clients are having trouble paying us. I'm not sure if it was a collection agent who knocked on my door recently, but I heard from my parents that someone was looking for me and was holding an envelope that said "Confidential". Would that be from the collection agency? Every time I've tried to explain my situation over the phone, the phone rep. just refers me to a monthly payment program or tells me about lowering my debt, neither of which I can afford because I haven't been paid since June 2009. I may be able to pay my bills in the near future, but not right now.

It is possible and legal for a collection agent to appear at your door to attempt to collect a debt. I spoke to a reader who had a debt collector do just that. However, it is very rare for personal debt collection due to the cost. A telephone call is more cost effective.

It is far more likely the visitor was a process server and you were to be served a summons and complaint. A summons and complaint is just that — a court order to appear before a judge for the reason stated in the summons. My guess is one of your creditors became impatient and decided to sue you to collect the balance due on your account.

If you have problems paying your credit card debts, consult with a debt resolution partner who can discuss your options.

I recommend you attempt to resolve this debt with the creditor or the creditor’s attorney before the hearing. If you obtain a fairly sizable portion of the balance, the creditor may be willing to settle the debt. For example, if you can offer 40%-60% of the outstanding balance in a lump sum payment, the creditor may be willing to forgive the remaining balance and dismiss the court case. Contact the creditor’s attorney to discuss settlement of the debt and keep trying to negotiate. If you come to a dead-end there, you have the option to set up a payment plan.

If you cannot access a lump sum to settle the debt, the creditor may be willing to accept monthly payments to stop further collection activity, but will probably not dismiss the case against you. The creditor will want to obtain a judgment against you just in case you do not make your scheduled monthly payments. Again, contact the creditor’s attorney to discuss possible repayment plans and ask them about a stipulated judgment payment plan.

If you do not resolve this matter, the creditor will likely obtain a judgment and proceed to attempt to collect on the judgment. Depending on the state you live in, judgment execution could include wage garnishment, bank levies, and property liens, and other actions. I encourage you to speak with a local lawyer to discuss the implications of a judgment against you, and what is the best course of action to resolve the account.

I hope this information helps you Find. Learn & Save.



Dealing with debt

If you are struggling with debt, you are not alone. According to the NY Federal Reserve total household debt as of Quarter Q2 2023 was $17.06 trillion. Student loan debt was $1.569 trillion and credit card debt was $1.031 trillion.

According to data gathered by from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

Collection and delinquency rates vary by state. For example, in Hawaii, 11% have student loan debt. Of those holding student loan debt, 7% are in default. Auto/retail loan delinquency rate is 3%.

Avoiding collections isn’t always possible. A sudden loss of employment, death in the family, or sickness can lead to financial hardship. Fortunately, there are many ways to deal with debt including an aggressive payment plan, debt consolidation loan, or a negotiated settlement.



TTonisha, Aug, 2012
Hello! I am an freshman student at MSU! I owed them a little over a thousand for my tuition. I do not have a job. I talked to my dad about paying them and he decided to pay them the whole amount at once and I've been owing them since last summer! He paid them Aug 3rd he sent a check through the mail and days later a reliant company (debt collector) sent me a letter and I called and told them it was invalid and she was saying okay n I told her when I sent it and she was saying they probably haven't received it yet! So when they do she'll cancel it and now MSU forwarded their check to them saying they had already gave it over to them and it's nothin they can do and I also took a picture of my MSU account saying the amount was due Aug 9th and my dad have a copy of the check of how they put reliant name on the back of it so they could cash it! Also the debt collector calls me from a Louisiana number and her paper hve Ohio on it and she had acted very unprofessional one day even though she claimed she was recording the call!! What should I do can I fight this in court?
BBill, Aug, 2012
I certainly understand why you're frustrated. I am not sure what steps are best for you to take, if you continue to get the run around. If you're not being hit with additional fees, then I think that you should just pay the collector and close the issue. You could take them to court, but is it worth the time and effort?
MMichel, Dec, 2010
Hi fellow debtors,I need to take all that on board. As the use of Credit cards is easy, we use them now and then and one day we find ourselves in massive debt. I was overcome with debt and was very distraught. I chose a debt resolution firm and it was the answer to all my prayers.