Debt collectors can hassle and annoy you, even when they are within the law. Negotiating with debt collectors can be intimidating. At best, it’s embarrassing to have to explain your finances to a perfect stranger. At worst, the debt collector oversteps his or her bounds and breaks the law with threats and harassment. But avoiding the situation will never solve your credit problems, and in fact can only make the situation worse.
Here are five tips to negotiating with debt collectors and getting your finances back on track:
- 1Get familiar with your rights under Fair Debt Collection Practices Act. Before you pick up the phone and start negotiating with a debt collector, make sure you know what constitutes legal and illegal debt collection practices. You’ll be in a better negotiating position with debt collectors if they are aware that you understand the way they are supposed to behave when they’re collecting a debt. The more educated you appear with regard to the law, the less chance they’ll try to get away with something that’s illegal.
- 2Don’t volunteer too much personal information. Debt collectors will try to get as much information out of you as they can. Remember to keep your information private – it’s really none of their business what you’re going through. Explain why you can’t pay that particular bill right now, but don’t tell them your life story. They’re not going to care – they hear from people in the same situation every day and their priority is to get you to pay no matter what.
- 3Remember your priorities. This economy has more and more people falling behind on their bills. Most likely you are just in this situation temporarily, but during times like these remember that you must first and foremost provide for your family. A debt collector is not going to understand, but it is up to you to set your foot down about your priorities. Remember the three tenets of priority in times like this: food, shelter, and car to get to work (or get to interviews). No matter how a debt collector tries to strong arm you into paying that hospital bill or credit card charge, your number one priority is to put food on the table, a roof (with electricity and heat) over your family’s head, and provide yourself a way to provide. Everything else comes next.
- 4Offer an amount to pay off the debt that is less than what you owe. Debt collection agencies have purchased the debt from the original lender for a cut rate. Many will settle on an amount less than what you really owe just to be able to collect something. If they refuse to reduce the amount, then ask for a payment plan over the course of a year. Once you’ve agreed on the terms, make sure you ask them to remove what they’ve put in your credit report. If they won’t do that, request that they say it was “paid in full” rather than “paid in settlement” on your credit report.
- 5Once you’ve reached a payment agreement, make sure you get it in writing, and that the agreement is signed by the debt collector with whom you’ve been negotiating. If the collector leaves the agency, or your debt is sold to a different debt collector, you’ll have your terms in writing and they can be honored.
Remember that, in this economic climate, you’re not alone, and debt collectors are more willing than ever to negotiate. On the other hand, they can get desperate as fewer and fewer people are able to pay their bills. If a debt collector gets abusive or starts to harass you, it’s time to contact a lawyer. The attorneys at Lemberg & Associates want to make sure that their clients are free from harassment and will fight to make sure they get what the compensation that the law provides. We’ll put a stop to harassing behavior and see that you get compensation for your harassment.
