What Happens in Default?

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Asset Recovery Associates
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Specializing in consumer debt management, Asset Recovery Associates builds relationships with diverse groups like multinational banks and local stores. A common type of debt that Asset Recovery Associates handles is credit card debt, which often ends up in default due to an accident or financial setback.

When credit card debt goes into default after 180 days of nonpayment, most companies that own the debt write it off as a loss and move on. This debt is then sold to an agency that specializes in debt collection, which can contact the debtor and request payment. Defaulted debt also ends up on the debtor’s credit report, which usually brings the debtor’s credit score down drastically.

Debtors have several options for working with a collections agency and should generally try to work out some type of payment arrangement rather than avoiding repayment altogether. Ignoring debts can often lead to legal battles and wage garnishment. Paying off the debt in whole is often the best option, provided the debtor can afford it. Some debtors instead choose to work with the collections agency to settle the debt, paying a portion in exchange for discharging the remainder of the debt. Filling for bankruptcy also can provide debtors with some protections from agencies that collect on debt.

What Is a Credit Report and Why Is It Important?


Techniques for Reducing Everyday Expenses

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Reducing Everyday Expenses
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In its effort to secure payment on outstanding debts, Asset Recovery Associates works to understand each debtor’s financial situation and existing obligations. Asset Recovery Associates uses this information to help debtors find a way to afford repayment.

Repayment of a debt often involves minimization of other expenses. Although it does require discipline, this process does not necessitate undue deprivation. For example, many homeowners find that they can noticeably cut energy costs by weather-stripping windows and sealing air ducts, switching to a programmable thermostat, and using energy-efficient light bulbs.

Similarly, car owners can reduce the significant costs of ownership by reducing maximum speed to 55 mph, which can improve gas mileage by up to 17 percent if one’s typical maximum speed is 70 mph. Removing excess cargo weight can also improve fuel efficiency, as can properly inflating tires.

Consumers can reduce expenses at the grocery store simply by sticking to a list, as doing so tends to reduce impulse buying. Coupon use and a bit of market research can help a buyer to find the best prices for the same items, and purchasing less costly versions of similar items can have a similar result. Buyers may also find that fresh ingredients ultimately cost less than prepared foods, as well as result in tastier meals.