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Nobody likes the idea of dealing with creditors. I never met a collection person that was kind or nice to me when I was struggling to pay my bills. They usually approached the conversation in attack mode, which of course put me on the defensive. It seemed like no matter what my answer, it was never good enough.
When you’re dealing with creditors, it seems they are trained to provoke you into bad behavior. They get their rocks off by threatening you, scaring the crap out of you, backing you into a corner and getting you to believe the lies they tell you so you can act in an irrational manner and strike back. But that’s not going to work, and stooping to their level is never the answer.
So how do you deal with creditors? How do you throw them off their game so they’re willing to work with you?
Creditors are used to people dodging questions, making excuses, yelling, hanging up on them and more, so when you turn the tables, their defenses are lowered, and you can work together.
If you’re faced with creditors, here’s a couple of tips I learned that makes dealing with these difficult people a little more tolerable.
1. Take Personal Responsibility
The fact of the matter is most of us end up in debt, with collectors breathing down our necks because we made some bad decisions and choices. You’ve got to stop blaming other people for your financial circumstances, and first acknowledge you made this mess and you’re willing to take responsibility for your actions. You’re ready to start cleaning up the mess.
Stop ignoring the calls and letters and start engaging with your creditors to come up with a plan to pay your debt. Standing in your power in this way is worth more to your integrity than playing the hide and avoid game, and it will go a long way when dealing with the collections person on the other end of the line.
2. Be Prepared
a. Check Your Credit Report: Before you pick up the phone, get a copy of your credit report from all three credit bureaus, and make sure it’s accurate. If it’s not, start working on cleaning up your report and having any false credit reports removed. You can do this directly with the credit bureaus.
b. The Fair Debt Collection Practices Act gives rights to consumers and regulates the practices of collection agencies and creditors. Everything you need to know, from all of the prohibited conduct and conduct required by the collection agents and creditors, to what your rights are as a consumer can be found at Fair Debt Collection government site.
Make yourself familiar with your rights. They are not allowed to violate the boundaries during the phone call, and if they do let them know they are violating the FDCPA and if they continue to do so, you will report them.
Don’t let these people abuse you. They will try every trick and manipulation in the book to try to get you to do something stupid. End the call and try again at another time to develop your plan with that creditor. If they continue to violate the Fair Debt Collection Practices, report them.
c. Develop A Plan: Before my financial meltdown I was usually on time with my payments and rarely had late fees. I did have a significant balance, but I still paid the minimum each month. I had a history that was noteworthy, and I used this to my advantage and as part of my plan.
I developed a plan of what I realistically could afford to pay each creditor, and was ready with my facts and figures when I called to discuss this with them. Try to have this discussion before they start the collection process, as creditors would rather have you pay a small amount of your bill each month, and then have to start the expensive collections process.
Additionally, be prepared to explain the reason you can’t pay; your current income and prospects for future income; other obligations (bills) that you have; and your plans to bring this debt up-to-date and current, including the amount you’ll be able to pay each month.
3. Offer Solutions
Creditors may not be willing share with you options that could solve your problem, so know before you call what options might work best in your situation.
You can reduce the monthly payment; refinance the loan; defer payments for a short time if you expect that your income will increase in the near future; pay only the interest on the loan until you can resume making monthly payments or voluntarily surrender an item you purchased on credit.
Make sure you fully understand the ramifications of any of these solutions. For example, if you reduce the debt and make an agreement to pay off only a portion of what you owe, it will affect your credit and may have tax implications.
No matter what option you choose, you are responsible for paying your balances to your creditors.
Remember, taking responsibility and finding a solution will ease the fear and anxiety of dealing with less than friendly debt collectors. Get your head out of the sand and establish your plan of action today.
Post Note: When in doubt, consult a reputable attorney, accountant or financial advisor for professional guidance. For those considering bankruptcy, please consult a bankruptcy attorney in your area so you can fully understand all the ramifications of the bankruptcy process.