Learning how to talk to debt collectors properly can be an important skill when you are experiencing tough times. Speaking with debt collectors can be an intimidating experience. They can be very pushy and make you feel like you are backed into a corner with no options. Although it is easy to feel like you have no options, you actually have more than you think you do.
It is important to understand a debt collector’s role. Let’s say you owe money to a company and you haven’t been making payments. They will hire a debt collector to contact you and maybe even take legal action in order to help that company get the money they are owed. That is why it is important to know how to talk to debt collectors.
When a debt collector calls you it is important to speak to them. (If you are having a bad day, it is fine not to take the call that day but do not ignore them.) The information you give them will help you settle your debts. In deciding whether to bring a lawsuit against you for collection of the debt, they will look at their phone logs and your credit report. That is why it is important to talk to them.
There is a lot of fraud out there, especially in the debt collection industry. You always want to verify that they are true debt collectors. For instance, the IRS will never call to collect a debt. Never give them your account number (they should have it). The following are tips on how to have an effective and controlled conversation with a debt collector.
1. Stay calm
Take a deep breath if you need to. If you are flustered, you won’t be able to remember as much about your conversation and you also don’t want to accidentally agree to something without having time to consider all your options.
2. Plan what to say if necessary
If you are not sure what to say when they call, take a pad and write what you want to say when they call. Make sure the information you give them is truthful. For example, money is tight right now. The next time they call, you may say you are unemployed. The next time they call, you may say you are still looking for work and so on. Paint a sad picture for them.
3. Grab a pen and paper
Make sure to take notes during your conversation. It is okay to ask for a minute to write some things down, too. This will help you remember what was discussed, especially since these conversations can involve a lot of numbers and dates.
4. Keep private information confidential
Do not share your personal information such as your financial situation, bank account, credit card numbers, employment, phone numbers, etc.
If you are considering filing bankruptcy, do not tell them at first you may be filing. After a number of calls and the picture you told them looks bad, you may then want to bring up the word bankruptcy. (Creditors hear the threat of bankruptcy all the time so build the foundation.) They will be more willing to work with you to help you avoid that. This helps put a little more of the negotiating power on your side, but be careful not to make this an empty threat.
Finally, one of the most important lessons on how to talk to debt collectors is that all agreements should be made in writing. An email or a signed and dated paper are good enough to have proof of your agreement.
Disclaimer: Each business and/or individual situation is different and unique. This article is intended to provide you with general advice only and not to be construed as legal advice. If you would like a detailed approach to your particular situation, please contact David J. Winterton & Associates for a consultation to discuss your options.