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Ask the Creditor to Take the Debt Back If you want to negotiate directly with the creditor, ask the collection agency for the phone number of the collections department of the original creditor. Then call the creditor and ask if you can negotiate on the debt directly with the creditor.
The key is to be thorough in your request for debt verification. In your letter, ask for details on: Why the collector thinks you owe the debt: Ask who the original creditor is and request documentation that verifies you owe the debt, such as a copy of the original contract.
A foreclosure is simply the closing of a Home Loan by paying off the entire amount borrowed in one lump sum amount. It is part of the regular Home Loan process and allows you to pay off the borrowed amount before the EMI schedule. You can opt for a foreclosure even after having made a few EMI payments.
To request verification, send a letter to the collection agency stating that you dispute the validity of the debt and that you want documentation verifying the debt. Also, request the name and address of the original creditor.
A "power of sale provision" is a clause in the loan contract. In this clause, the borrower pre-authorizes the property's sale through a nonjudicial foreclosure process after a default. The sale proceeds pay off all or part of the loan balance.
But what must the creditor provide by way of documentation? At a minimum, it must produce: A copy of the original written agreement between the parties, such as the loan note or credit card agreement, preferably signed by you.
If you're able to do so, pay the original creditor before your debt goes to collections. Having a debt sent to collections will damage your credit score and may limit your options for repayment. In most cases, the original creditor will offer better repayment options than a debt collector will.