If you are dealing with overdue payments on your credit cards, medical bills or other debts, you may already dread when your phone rings. In fact, like many in Minnesota who are under the same pressure, you may avoid those calls or even block them.
Debt collectors must follow strict rules under the Fair Debt Collection Practices Act, but even when they abide by those laws, such calls may still be uncomfortable and upsetting experiences. However, you may be able to use those calls to your advantage if you are willing to try negotiating with the debt collectors. After all, many creditors prefer getting something from a borrower to getting nothing at all. Negotiating with creditors is a delicate operation that may take courage, persistence and knowledge of your rights.
Are you ready to make a deal?
To begin with, it is important to be certain that you actually owe the debt in question. Many people become so overwhelmed with their debt that they simply believe a caller who says they owe money. Sometimes these are scams, and sometimes the creditor has made a mistake. Always begin by requesting a written verification of the debt and taking the time to investigate the collection agency who calls. Once you are certain everything is valid, you can begin negotiating for a lower amount by following these steps:
- Remain calm and confident. Debt collectors often take advantage of your nervousness.
- Ask the caller about options for a payment plan that may fit your budget.
- Depending on the kind of debt, such as medical expenses, inquire about financial assistance.
- Know ahead of time if you can offer an amount lower than the balance in a lump sum or through installments.
- Inform the caller that you are considering bankruptcy, which may prompt the creditor to accept a smaller amount.
- Even if the creditor accepts a lower amount, ask that the credit-reporting bureaus receive a report that you paid the debt in full to avoid more negative information on your credit report.
Always take notes when you speak to a debt collector. Write down the date and time of the call, the name of the caller, and the points you discussed. Also, note any violations of the FDCPA that may occur during the call. If the creditor agrees to your negotiation, ask him or her to send you a written confirmation of the agreement.
It is understandable if all this seems overwhelming. There is a lot a stake, and some creditors may not take your negotiations seriously. You may wish to obtain the services of a skilled attorney who has experience dealing with debt collectors and helping consumers repair their damaged credit.