When a debt collector calls, it can be not only annoying, but also a little scary! But dealing with debt collectors does not have to be something you fear. Let me show you what to do...
No matter how serious you financial and/or debt situation is, there is a solution. DON'T BE AFRAID!
- Debt collectors are people just trying to earn a living.
I've been dealing with them for many, many years and most of them are not hard to deal with. If, you know a few things about them.
Usually, the debt they are calling about is one that you owe.
Of course, if you can prove that you don't, you can always demand that they "validate" the debt by providing documentation.
The Fair Debt Collection Practices Act (FDCPA) gives us protection from illegal debt collection practices.
Basically, it spells out what a debt collector can and cannot do in attempting to collect debt. It allows a consumer to question the validity of the debt they are calling about.
There are also many "credit repair" companies that advocate using the validation process to remove debts from our credit report.
While you should challenge or dispute errors on our credit report, beware of opening a validation dispute on accounts you owe as it might backfire on you!
Unless you can prove beyond a doubt that you never had or have paid the debt with proof in writing, don't send the letter! Why?
A debt collection company has been retained by the original creditor or the owner of the debt. Yes, creditors buy and sell debt. In fact, it is a multi-million dollar business.
Anyway, while a request to validate the debt may work, it could cause the debt collector to become very aggressive in their collection efforts!
This may include filing a CLAIM, resulting in a SUMMONS, that may lead to a JUDGMENT, which could lead to WAGE GARNISHMENT, LIENS and BANK LEVIES!
So, before you "jump into" debt validation...You need to contact the collector, but before you do, get prepared:
1) First, you'll need a BUDGET:
2) Call the collector:
Be calm and respectful!
Trying to act "tough" or being disrespectful will NOT HELP!
While you'll need to explain your situation, don't "over do it". The collector may need to submit your settlement offer with some budget information to the owner of the debt or they may be able to discuss and negotiate a settlement right now.
Always ask them what it would take to settle the debt!
They may come back with, "How much do you have to offer?"
Say something like, "I don't know, I am barely making it now. What will it take?"
In negotiations, the person who gives out an amount of money usually loses!
Let's say you owe $5,000 and they say they can settle for $4,000. While that is a nice $1,000 reduction, you should be able to do a little better. Say something like...
"I just don't have $4,000, but I may be able to could come up with $2,000 if you could give me a little time." That's it...stop talking...wait for a response.
They may or may not accept, or they might come back with a counter offer.
You're trying to get somewhere around 50%. Here's a few examples:
Negotiating a settlement is not easy! (I know! I've been doing this for about 17 years now!)
If you are successful in negotiation a good settlement, you MUST GET THE AGREEMENT IN WRITING!!!!!!!!!
Let me state that again....NO AGREEMENT IN WRITING....NO DEAL!
If you are unsuccessful, then just tell them that you'll have to get back to them and politely hand up. They may or may not follow up with you.
FINALLY, the worst thing you can do is to ignore the debt.
If you do, while the account may be pulled back to the owner of the debt and transferred to another collector, it cause the collector to become too aggressive and possibly initiate legal action by the collector!
By dealing respectfully and confidently with the debt and the collector, you may be able to settle the debt or if necessary, just set up payments to repay the entire debt.
Hope this helps!