8/5/2013 2:45 PM ET|
Turn the tables on debt collectors
There’s no shame in owing someone money, but it doesn’t always feel that way when collectors bombard you with mail and phone calls. Here’s how to work with them without feeling powerless.
If your phone is ringing off the hook with calls from debt collectors, it's not likely that you feel in control of the situation. But letting yourself feel scared or intimidated isn't a good option, either. Go down that road and you may wind up making promises you can't keep, or payments you can't afford.
What if there was a way to turn the tables on debt collectors so that you are in control of the conversation, and can actually come up with a solution to put those debts behind you? You'll find nine approaches to doing just that here.
Note, however, this is not about trying to get out of paying your debt if you can afford to do so. What we are talking about here are legitimate ways to deal with aggressive or relentless collectors who continue to pressure you to pay debts you owe but are impossible for you to pay right now. If you suspect the callers aren't on the up and up, though, you'll need different strategies for stopping debt collection scammers; and if you are getting calls for someone else, you'll want to read about what to do if you are getting collection calls for the wrong person.
Don't wait for them to call
Consider picking up the phone and calling the debt collector yourself. "People I have worked with over the years find they have a different mindset when talking with a debt collector when they have made the call themselves," insists Michael Bovee, founder of the Consumer Recovery Network where he provides free information about how to talk with debt collectors. "You are better able to prepare for the call and are dialing with a prepared strategy and purpose. Most people feel they are more in control of the call when placing it themselves."
Check them out
By the time a bill collector calls you, he probably knows a good deal about you. He probably has reviewed your credit reports to see what other debts you owe. He may have checked out your employment using The Work Number database. He may have even checked out your Facebook profile.
You, on the other hand, are getting a call from a company you've probably never heard of before. And even if you know you owe the debt, it's reasonable for you to check out the collector. At a minimum, you want to make sure you are dealing with a legitimate company and not a debt collection scammer.
Ask for the agency's address (you are entitled to this information) and check them out with the Better Business Bureau. Call your state's attorney general office to find out whether collectors must be licensed in your state. If so, confirm whether they are. Most states provide an online look-up tool for checking the licensing status of a business.
What if the collector won't tell you who is calling? If you have caller ID, type the phone number of the company that's calling into a search engine, suggests Sukhman Dhami, founding partner of The Dhami Law Firm, adding, "You can learn a lot online." You may find the name of the agency as well as learn about complaints from other consumers.
Dump it back in their lap
If the debt collector is trying to collect on a debt that you don't recognize, or you think the amount is wrong, or you think it's too old, ask them to validate the debt. You have the right to do so under the federal Fair Debt Collection Practices Act. "Asking for proof how the debt was calculated and to demonstrate it is a valid debt you owe will put you back in the driver's seat by asking them to support their claim," says Steve Rhode, a.k.a. "The Get Out of Debt Guy." He provides a free sample debt validation letter on his site. At a minimum, requesting validation of a debt gives you time to research the debt to determine if it is legitimate and figure out what you can afford to pay toward it. (If a debt collector refuses to verify the debt after you've requested it, the company may be breaking the law.)
Stick to business
You may feel guilty or embarrassed that you couldn't pay your bills. The collector knows that and may try to use that to his advantage. "There is a great deal of psychology used by debt collectors to create feelings of guilt and obligation on the part of debtors," warns Atlanta bankruptcy attorney Jonathan Ginsberg. They key is to try not to get swept up in the emotions. "When the debt collector calls, people panic, and when they panic they don't think clearly. This leads to more stress, fear, intimidation, and loss of control," agrees Rhode.
A couple of years ago, Ginsberg interviewed Kenny Golde who was able to settle $250,000 of credit card debt for less than 50 cents on the dollar and went on to write a book about his experience. In that interview, Kenny explained that the key to his success arose from treating all interactions with debt collectors as business dealings, understanding that their focus is on collecting funds as quickly as possible, and knowing he had a certain budget he had to stick to.
VIDEO ON MSN MONEY
Take your business to Washington, D.C.
That should keep you busy for a long, long time.
Had a debt collector tell me in a very condescending tone "You could have payed as little as $15 a month and had this cleared this up by now" to which I responded "When I offered to pay $15 a month you said it wasn't enough, bye!"
Good advice about checking if the collection agency is legit. I got a call on merchandise that I never ordered or received and the collector was rude and threatening. When I told him I was not a customer, he had the nerve to call me a liar. After several calls and them getting more hostile I contacted the company in writing telling them to quit contacting me and over the phone. I now have a letter stating I was never a customer and did not owe them anything. They were calling every month or so, but since I contacted this company it's been about 7 months without them annoying me. Sometimes I think they try to get money that you do not owe.
if your getting sued by ASSET ACCEPTANCE, LLC answer the summons or they will get a automatic judgement against you nothing you can do about that.
Simply state you do not recognize the debt and need more information...Then file a sworn denial that acccording to the information attatched to the summons you still do not recognize the debt.
That will get the ball rolling in your favor since they have to PROVE EVERYTHING in their complaint and their heresay affiadiat they might come up with will mean nothing they have to produce a LIVE witness
ASSET ACCEPTANCE, LLC has been sued by the United States Government (Federal Trade Commision) on 9 counts...Asset paid a $2.5 million dollar fine and entered into a CONSENT AGREEMENT ....which you can use as part of your defense...that pisses em off!
if the debt is unsecured like credit card debt...tell'em to take a hike. put all your assets in your wife's name, or any other trusted relative's name....if you are retired as is the case with many who are trying to get out of debt be aware the collectors cannot garnish your SS or some other types of retirement benefits. So if your house, car, savings account, any other property you own is all in someone's name other than yours...the collectors of unsecured debt are SOL.
****'em...I paid every bill I ever had for 38 years. Had an 810 credit score. Through no fault of my own I had a financial problem with a simple change of address request throught Bank of America. Long story short...the mim. wage moron
recorded my change of address incorrectly. By the time it was corrected 6 1/2 months later my credit score was under 600
because BOA reported me as a 'slow pay account' and other creditors took negative action based on that information.
My limits were lowered meaning that my 'credit utilitization' was considered a negative which in turn caused other creditors who I had continued to pay as agreed began taking action that made a bad situation worse. I finally said...**** this.
I quit paying them all. Moved all my assets to my childrens names and told the crecitors to get hosed. They sued, got the judgements against me....of course I could not pay so the judgements just sat out there in limbo. A judge ask me at one of my hearings why I had not simpley filed for BankRupt. I told him that would not do me any good personally. My credit would still be ruined, the creditors would not get a cent and some jackassss atty would charge me 3K to file. If your debt is unsecured, you are retired...in other words have no income that can be garnished you are in the drivers seat.
Only seeing a lot of 3rd party fraud; and, the credit reports never show PROPER ACCOUNTING and are basically junk. Any stupid Collector calling me owes $16,000 for violating the DO NOT CALL rule...they OWE ME because they can't even figure out that it is FRAUD and not DEBT.
In the comment about the caller Id check you are presuming that their number shows up, and shows up as a valid number. I have had a scammer call with a number that was the number of the local cable company, and the only way I knew it was not related to the cable company was that I had just dialed the number myself.
Some of the collectors sue and work to make sure that you can not be there to defend yourself from their claims no matter what they are. I have had summons to court that have been served for a court that was a 6 hour drive away that arrived less then an hour before the time I was due in that court room, thus I was ruled vs.. by summery judgment.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
RECENT ARTICLES ON DEBT MANAGEMENT
As fears rise over costs and higher tuition, some law schools advertise their own plans to cover loan replacements.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'