http://www.destroydebt.com/blogs/avocadophantom.html Thoughts From a former Bill Collector www.destroydebt.com Wed, 21 May 2008 11:11:57 GMT webmaster@destroydebt.com webmaster@destroydebt.com http://www.destroydebt.com/blogs/avocadophantom/211-how-to-negotiate-debt-settlement-pt-1-by-a-former-bill-collector-.html http://www.destroydebt.com/blogs/avocadophantom/211-how-to-negotiate-debt-settlement-pt-1-by-a-former-bill-collector-.html Wed, 21 May 2008 11:11:57 GMT For the purpose of this discussion, let's say you owe five thousand dollars to a fictional credit card company, LGI. Their in-house delinquency department tried to collect the balance from you for awhile, and have now sent your debt to a collection agency. The debt is now showing up on your cred...
Right off the bat, I feel I should mention that some companies will not allow collection agencies to settle under any circumstances. Other creditors may only allow settlements of debts that are over a certain dollar amount, like five thousand dollars or more. So if your collector tells you they are not allowed to settle, chances are they are telling the truth.

In order to successfully negotiate a settlement, you need to understand the mindset of the average collector. If you call up and demand a settlement right off the bat, they will probably ask you if you pay full price for everything else in your life, and if so, why aren't you willing to pay what you owe in this instance? Some collectors compare it to going into a restaurant, eating the meal, and then demanding that the waitress give you a break because you don't want to pay the full bill. They also might ask you how you would feel if your boss couldn't manage his money and he suddenly said he only wanted to pay you fifty percent of what you've earned.

Another thing to always keep in mind is that generally speaking, the more a collector collects, the more they earn. Many collection agencies offer a base pay plus a lucrative bonus structure for those that achieve monthly goals. Doing a settlement can mean less pay as well as more work for them. Typically, settlements have to be approved by management, and there's usually papers that need to be drafted and signed. In collections, time is money, and the time a collector spends sending faxes and getting signatures could be used in working other accounts of debtors that will pay their balance in full. Some debtors erroneously think that they can make any sort of settlement offer and the collector should be glad to get any sort of money. However, the typical collector knows that the longer the debt stays on your credit report, the worse your credit rating will probably become and its in your best interest to resolve the debt as quickly as possible, either by payment in full or negotiating a settlement.

In my next post, I will go into great depth as to what to say to the collector, what not to say, and when to say it. Your conduct during your conversations with the collector can have a great bearing as to whether or not you receive the settlement you want.]]> http://www.destroydebt.com/blogs/avocadophantom/208-what-not-to-do-when-a-bill-collector-calls-by-a-former-bill-collector.html http://www.destroydebt.com/blogs/avocadophantom/208-what-not-to-do-when-a-bill-collector-calls-by-a-former-bill-collector.html Sun, 18 May 2008 07:40:42 GMT For those that want to clear up debts and obligations, it is important to know what steps to take. However, it can also be vitally important to know what NOT to do. I thought I would share tips to what to avoid if you want the bill collector to work with you and not against you: The first step...
The first step is simple, yet crucial: Do not lie. Ever. Most bill collectors have  a built-in lie detector and can immediately tell when someone's lying. Do not say your father, mother, sister, brother or pet goldfish just died, unless it's absolutely true. Do not lie about your work situation either. For many people, their place of employment is listed on their credit report, so trying to hide your source of income can destroy your credibility. Remember, bill collectors are much less likely to negotiate terms if they have to wrestle the truth from the borrower.

Secondly, never EVER have your child screen your calls. Do NOT, under any circumstance, put your son or daughter on the phone and then have them lie for you. This is one of the surest ways to raise the contempt and ire of the typical collector, most of whom have children too. It is stressful enough for grownups to deal with debt, do not expect your child to handle the tension any better than you do. The typical collector's attitude is, "You ran up the bill, you should be adult enough to face the situation."

The third step, do not be disrespectful to the other person on the line.  Now, I'm not saying to bend down and kiss their toes, but try your best to keep your part of the conversation as civil as possible. Talk to them like you'd talk to the clerk at your local grocery store. Despite rumors to the contrary, most bill collectors are human and have a family to go home to at night. As a collector, I had some latitude as to how each situation was handled. If someone treated me fairly, I would work with them as much as the situation allowed. However, if someone started each conversation with profanity-laced insults, then I usually didn't give them any more leeway than what was required.


Fourth, do not make empty threats. Never say you are going to call your lawyer, unless you actually have one on retainer. The average collector hears that line at least once a day, if not more. The collector is also aware that if you don't have the money to pay your debts, then you probably don't have enough to hire a lawyer. Generally speaking, threatening to complain to their manager is futile. Odds are, the collector learned their techniques from their boss, and the supervisor may be less willing to make payment arrangements than the original collector. Don't use threats to report them to the FTC as a way of sidestepping the issue. Parenthetically, if you do have a bona fide complaint, most collectors prefer that you file a report because it helps clear the bad eggs out of the industry. But most experienced collectors are experts at staying within the boundaries of the FDCPA.

Being past due on your obligations can be trying and difficult. It is in your best interest to maintain a level head, keep your ego in check, and work with the collector so that both of you can feel like you've achieved a win-win situation.]]>