When you negotiate with a debt collector you are going up against a tough and seasoned professional. Following these tips can help take the advantage away from them and put it on your side.
Know Your Rights Before You Begin
The first thing you need to do is to educate yourself on what your rights are. Your first assignment is to learn about the Fair Debt Collection Practices Act. You can also get a free brochure on the rules of debt collection from the National Consumer Law Center. Call 617-542-9595 and ask for the brochure “What You Should Know About Debt Collection”. You may also want to contact your state’s Attorney General to see what the rules are in your state.  There are things that a debt collector can and cannot do. Just because you owe them money doesn’t mean that they can harass you mercilessly. When you know what your rights are and you emphasize to the debt collector that you know what your rights are, they are less likely to use aggressive collection tactics.
Tips For Successful Negotiation
•    Your first step is to prioritize your bills. No matter what the credit or debt collector says, the most important thing is to provide for your family’s necessities. It is silly to put yourself in a position where you can’t pay for your basic living expenses.

•    Have the collection company validate the debt that they say you owe them. This action alone might stop them in their tracks. Learn more about debt validation.
•    Calculate how much you can afford to pay and pay less. I would never promise to do anything you cannot do. Do not send post dated checks or agree to electronic payments from your bank account. Once they have your payment information, you must trust that the debt collector will have the integrity to take payments at the correct time.

•    Skip the sappy story. If you think telling them the circumstances that got you into the position that you are in will make a difference, it will not. They really don’t care. They really don’t have any sympathy; they hear the hard luck stories all day long. They just want you to pay them as much money as they can get out of you.

•    Absolutely do not give them any personal information. Telling them where you live and work could be a big mistake. Keep in mind they only care about one thing: getting money out of you. They will have no problem contacting you wherever they know that they can find you. Just stick to whatever the facts are concerning your case.

•    Always keep your cool. Bill collectors make their living by rattling your cage or putting fear into you. That is how they can get people to come up with the money. The truth is that there is not much they can do until they have a court order or judgment against you.

•    If you are able, tape your phone conversations and tell them you are. Most likely they will get out of line at some point. You can then use this as leverage against them. They don’t want any trouble with state or federal agencies.

•    Take good notes. Keep all your collection letters and keep good notes on all of the calls that you receive. You may want to keep a dedicated log book by your phone. Record the date, time and the person you spoke with. Also keep detailed notes about the conversation and what was discussed.

•    Get all proof of payments in writing. I would even suggest sending them a personal check with a release written on the back of it. So even if they do not send you anything, you have a cancelled check documenting that they have released the debt. I would write something like, “By endorsing and depositing this check, said creditor fully releases and discharges said person from any future claims regarding this debt and the debt is paid in full.” This would work fine. I believe that it is always smart to have a back-up plan.

•    Make sure that they update your credit profile as part of the agreement – get it in writing that they will amend their credit reporting records on your account

•    Agree to a negotiated payoff at the end of the month. Most collectors are paid at the end of the month. This is the best time of the month to negotiate the best deal.

It is true that owing money can be no fun, but it does not need to ruin your life. It’s just money. If you are in debt, the road to getting out of debt can be daunting. The sooner you start the sooner you can be debt free. I always loved this saying, “How do you eat an elephant? One bite at a time.” It is a cute metaphor but very appropriate for paying off debt.
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When can a creditor call me? I think that most consumers believe that a collection agency cannot make calls to try and collect a debt on Sunday. A creditor is allowed to call you on Sunday. The provision that allows calls to be made on Sunday is spelled out in the Fair Debt Collections Practices Act.

Can a creditor call me on Sunday if the debt is with a collection agency?

If the debt is still with the original creditor they can definitely still call. Even if the debt is with a collection agency they can call from 8am to 9pm. If the collector calls outside of these times, they could be in violation of the fdcpa or Fair Debt Collection Act.

What can I do if the creditor is wrong? Just because a bill collector is requesting money from you does not mean that you actually have to pay them. Just because they claim to have documents supporting the debt does not mean that they actually do. Do not let them push you around into paying money that you do not owe. There are two things you can do to to prove you do not owe the money and the debt collector is wrong. Continue Reading »