Posted: 2/27/2009 5:34:50 PM
Bargain with a debt collector is like going head on collision with a tough, professional negotiator.
Tips that can help you keep ahead of these shrewd task masters.
Learn your rights.
When you know your rights the debt collectors
- know they can't bluff you
- Are less likely to try aggressive tactics
- Play fair
For details, check out consumer brochure on fair debt collection from the Federal Trade Commission.
A free consumer brochure on debt collection also is available from the National Consumer Law Center. Call NCLC's publications department at (617) 542-9595 and ask for a copy of "What You Should Know About Debt Collection."
Many states have their own debt collection laws. For more information, contact the attorney general's office in your state. Don't let retirement sneak up on you.
Prioritize your bills
No matter what a debt collector says, an unpaid credit card bill is not the most important bill you have to pay. Providing necessities for your family is.
Estimate how much you can pay and offer less.
- Don't do anything you can't afford to do
- Don't do anything dangerous
Avoid
- Sending postdated checks to a debt collector
- Automatic electronic payments from your checking account
- Presuming goodwill on the other side
Don't tell them your life story
Don’t explain them why you can't pay, because
- They don't have sympathy
- This is what they do for their living
- They hear these sob stories on daily basis
Keep private information private Say as little as possible about yourself and stick to the facts. Don't give a debt collector Personal information such as
- Your place of work
- Where you bank
- Your checking account number
Stay calm and focused
No matter what a debt collector says, keep your cool and stay focused on the negotiation which will ensure you
More in control
- Sound less nervous
- Get what you want out of the negotiation
Tape the call if you can Taping the conversation
- Keeps the debt collector on their best behavior
- Ensures that you have a record of the call
Thirty-five states and the District of Columbia allow you to secretly tape your phone conversations.
In the other 15 states, you can tape with the other party's permission.
Even after you announce to the debt collector that you are going to tape the conversation, and he or she keeps talking, that's considered granting you the permission do so.
Make sure there's a record
- File all collection letters
- Keep detailed notes of collection calls
- Note the day and time of each call
- The name of the collection agency
- The first and last name of the caller
- Make a note of what was said
- get proof of the deal you've made with them
Get proof of payment agreement in writing
- Send a letter to the debt collector outlining the payment agreement
- send the letter via certified mail
- receive a receipt once the letter is delivered
- Keep a copy for your records
- If you pay by check, write on the check that Cashing that check constitutes payment in full
Wipe your credit clean
Ask a debt collector to
- Remove any negative information they've placed on your credit report
- List your account as paid in full rather than paid in settlement
- Get it in writing once they agreed
Don't be rushed
- Do not let a debt collector rush you to send them money immediately
- Resist all those demands and quick offers
- Don't pay until you have confirmation of a payment agreement in writing
Negotiate at the end of the month
Commissions for debt collectors are based on what they do each month.
If you negotiate at the end of the month you would get really a good deal.
It is always right to know your rights and keep a record of all your communications when you confront debt collectors.
Posted: 2/27/2009 4:42:56 PM
All of us at one time or the other gets cash for a gift. How many of us crossed theroid to the nearest bank and opened a saving accounts? Very few. We might want to blow it off on the latest game software for the PS 1, 2 or now 3. That was about the childhood flippancy we may not leave behind and the habit of extravagance stays with us. Saving habit inculcated as a child is one invaluable gift that goes a long way with us for a stress free life. We should not make it a habit and blame it on the recession. Some exigencies justify borrowing. After all saving is earning.
If you were compelled to borrow recently and want to get out of it fast, consider, every month how much money you:
Carefully evaluate a long-term action plan to be rid of the debt on your own, in the following ways:
Cut your spending immediately
Little drops of water make the mighty ocean. You will be surprised how quickly small expenses add up to big savings. Make a list of the things you can do without and the things you can do yourself Expensive recurring services from outside agencies for house cleaning, manicures, lawn-care services are the things you can do yourself. Look at the big picture of having a debt free and stress free life. Restaurant food is one extravagance you can do without. Carry home made luncheons and breakfasts to workplace and watch your savings grow quickly in your account.
Other luxuries like premium cable, cell phone service with all those extras, new CDs or bills for online music are yet some more items one does not need. To save you real money every month opt for a less expensive cable/cell phone service package. Downsizing from expensive car/ apartment lease may prove difficult but not impossible. Such radical changes in the lifestyle add up to hundreds or thousands of dollars every month and would provide you with money you can use in paying off your debt.
Do not take a new debt until you are in total control of your finances.
You need to negotiate with your creditors, debt collectors, and credit or debt counselors. Stick to a budget and keep in touch with your creditors. If you have problems making payments, there always are ways you can convince your creditors, debt collectors, and credit or debt counselors about the seriousness of your intentions of repaying the debt.
The More Principal you pay off, the more you save on the interest
The relation between your debt payment and the amount of interest is at the end is always in reverse proportion. When more money goes toward paying off the actual debt, less of your money goes to paying interest on your debt and you will reach your debt reduction goal quicker. The larger your debt repayment, the greater the savings from bringing down the interest rates on it.
Negotiate with each credit card lender for a lower rate
Call the lender and let him know that you are shopping around for better terms. The credit card market is very competitive today, and you may find that this simple tactic can lower your rate by at least a couple of percentage points, and often more.
Prioritize your debts by interest rate.
Pay off the debts with the highest interest rates first, yet keep paying at least the monthly minimum due on each one.
Keep in touch with your creditors
If you face any hurdles in paying your bills:
- Contact your creditors
- Explain the problems you are facing
- Work out a modified payment plan for a more manageable one
Negotiating with your creditors early can save you real money by avoiding late and other penalty fees. It might also impress upon them that you are serious about your commitment and they will be more sympathetic and more likely to help.
Negotiate with your Debt Collectors
If your debt is long overdue, a debt collector may enter the scene to do the needful for your creditor. Debt collectors, like the original creditors, often consider a modified payment schedule if you request them to, in case of an exigency.
Know your rights and duties
Statute of limitations varies by state and you may be exempt from having to pay a debt. But then, certain debts like the government student loans can be collected regardless of how old they are. More information on your rights under the Fair Debt Collection Practices Act can be found on the Federal Trade Commission Web site.
In spite of the law, many debt collectors break the law with the impression that consumers are not aware of the protections afforded to them by the Fair Debt Collection Practices Act. WeStopDebtCollectors protects consumers from bad debt collectors by providing legal assistance, and we can help stop unlawful debt collectors for free which may also entitle you for cash compensation.
Posted: 2/28/2009 11:39:09 AM
The fair debt collection practices act offers protection from illegal and unethical tactics of the debt collectors. This awareness site provides you the in-depth information about the Federal Fair Debt Collection Law and other state collection laws against the third party collectors. A clear understanding of debt collection laws under the FDCPA will entail you to the power to fight the third party bill collectors. Let them not intimidate and scare you and your family, any longer.
Stopping the debt collector harassment starts with your knowing your rights as ordained by the FDCPA, or the Fair Debt Collection Practices Act. The Fair Debt Collection Practices Act is also known as the Fair Debt Act or FDCPA. The Fair Debt Act or FDCPA is a federal law and it protects consumers from the debt collector abuse. Much depends on how one is going to use it.
The FDCPA defines in very clear terms, the rules that bill collectors and the collection attorneys must follow while recalling a debt. Many states have their own laws on par with those by the FDCPA and they lay the ground rules for debt collection for creditors out to collect their debts.
Next time a debt collector calls, let your rights under FDCPA deal with them.