We see the commercials on television every day. A family sits down to enjoy a scrumptious meal and the phone begins to ring off the hook; the debt collectors are at it again. Suddenly, there is a lengthy period of silence, the kids look around, and the parents lower their heads until the ringing stops. At the end of the segment, a voice chimes in and offers a phone number for the debtors to call.
Unfortunately, this 30-second depiction is reality for a lot of individuals and families. Many are drowning in debt and don’t know where to turn. According to the Federal Reserve, the average credit card debt per household is $15,799. As a result, they just ignore the problem(s) in hopes that they will magically disappear.
The Sad Reality
What many fail to realize is the following: debt collectors will become more forceful if they sense that you are avoiding them. After all, the industry is a very lucrative one and the only way the companies generate revenues is by collecting. According to the Association of Credit and Collection Professionals, debt collectors raked in $10.3 billion in commissions (based on $54.9 million in debts) alone. They know that persistence pays off.
What is a Debt Collector?
Before we continue, it’s important to understand the role of a debt collector. Basically, they’re an individual or company hired by the specific creditor (who retains rights to the debt) to collect any outstanding balances. Some creditors sell their delinquent balances to third party debt collectors.
How to Handle Debt Collectors
Listed below are a few tips to help you deal with debt collectors the next time your phone rings.
- Instead of hanging up right away, hear them out. It’s human nature to become agitated when someone hangs up in your face; debt collectors are no different. Even if they use an unpleasant tone, let them say what they have to say because slamming the phone down every time will more than likely eliminate any chances to negotiate and win you a trip to court.
- Avoid diarrhea mouth. Out of fear and frustration regarding their financial situation, many ramble on and on about money woes. Don’t give away unsolicited information to debt collectors. Simply mention that you are unable to remit payment at the moment and keep it moving.
- Take good notes. Paper trail never lies but people do. Always record the details of every verbal interaction you have with debt collectors. Your journal should include the following components: company name, representative, date, time and synopsis of conversation.
- Trust no one. The debt collectors will ALWAYS insist that the debt is still outstanding but it is critical that you confirm for your own sanity. (You may discover that the statute of limitations has passed and you no longer owe the money).
- Don’t discuss secured debts. Debts of this sort (i.e. home mortgages, auto loans, student loans) are not eligible for modification through debt collectors.
- Request that all communications are stopped. If you exercise this option, this may force debt collectors to sue you since they will have exhausted all other options at that point. You can do so by using the Cease and Desist Letter.