**Disclaimer – Debtprison.net does not administer legal or financial advice. The contents of this website are my opinions on collection agencies and how to deal with them. Nothing on this website should be interpreted as legal advice or council. No opinions on this website should be used to replace the advice of your financial advisor or your legal council.
A highly trained bill collector knows how to get the most money out of defaulted debtors. While you are nervously thinking of what to say they are taking notes… updating your credit file. A good bill collector normally has an outgoing personality and tough outer shell. Therefore collectors learn early on not to take the job personal. They also learn how to take everything you say to build a case against you. A bill collector will listen carefully to everything you say (while at the same time recording the conversation), as well as the way you say it, to develop a plan of action which will most likely generate a payment from you. See also all of my articles on Collection Agencies.
Bill collectors are not your friend, and though they may appear concerned, they are really only concerned about their paycheck. Collectors work off of commission, often receiving 10 to 25% of your payment to the collection agency. So if they get you to cough up $100… they just made $25 buckaroos. These collectors also have a monthly quota to achieve. If they fail to meet the monthly collection quota they can be let go. A collection agency needs bill collectors that can produce dollars while maintaining a level of conduct compliant with the Fair Debt Collection Practices Act.
The only time I would consider speaking with a collection agency is when I have an offer for them. For example, I would give the dollar amount paid monthly, the total number of months to be paid, and the conditions of how I wanted this reflected on my credit report. They would then have to agree with those terms, put them in writing, sign the contract, and send me a copy. This would be a no debate discussion… here are the terms… period. If you don’t agree with those terms then contact me when you do.
Controlling the Conversation
The bill collector needs to stay in control of the conversation to steer you towards a payment. Maintaining control is their number one priority. Using a sort of psychological authority, since you owe them money, they proceed to make demands in a civil tone. A good collector is looking for verbal cues from you which will indicate what buttons he needs to push to separate you from your cash.
Collecting Asset Information
While the collector is buddying up to you… he’s updating your file with any asset information you provide. For example, if you say times are tough because you are paying on a house or vehicle note… well you just gave them an asset to add to your file. They will also inquire as to any land, homes, vehicles, savings accounts, or stocks, that perhaps you could sell to satisfy this debt. If you tell them that you have a job they will rightly figure that you can produce some monthly payment amount.
Lump Sum Demand
A collection agency will almost always demand a lump sum payment the first time you talk with them. They do this because many debtors are intimidated and cough up the lump sum. However, they do not need the lump sum and can be worked down to a rational monthly payment plan. Their goal is to get you on the phone, intimidate you with fear tactics, and proceed to collect as much moolah as possible. Did I mention that talking with bill collectors on the phone is a bad idea? A bill collector wants you on the phone – they don’t want you ignoring the calls, and instead, writing those pesky debt validation letters.
Legal Suit
Through the process of updating your file they will determine if they stand a good chance of collecting the money by pursuing a civil suit. If they know your house is paid for; this is a perfect asset for them to seek a lien against via a court judgment. If they know that you have a decent job they will seek to garnish your wages, and if possible, take money directly out of any banking account you have. A good candidate is one with at least one asset, at least a $500 balance, and the account is not in dispute.
Here are some good tips I found at wikihow.com for talking with collection agencies on the phone (if this article didn’t convince you not to):
You must keep a calm, reasonable and well mannered tone of voice. Any yelling, name calling or other verbal tactics will damage the image you’re working to project.
If they speak to you in any way that you find objectionable, give them one warning, as mentioned in your opening statement. The second time you should ask to speak to their supervisor. When you’re connected with the supervisor start again from step one.
Write down everything, including: the date and time of the call, name and position on the rep calling you, what they want, what you’re offering, etc.
Many times the names of the collectors are not their real ones. One way to figure it out is to send the signature receipt letter addressed only to that one person. If they sign back with their signature on the letter, they must be that person (otherwise it becomes a federal offense of mail fraud).
Sometimes you just can’t win because they won’t listen to reason or acknowledge that you legally are not obligated to the debt. In this case – you should establish a long paper trail indicating that they did not wish to collect on the debt in good faith. When they file your collection with the credit agencies, mail copies of your paper trail to all three, with documentation that they violated the Fair Debt Collection Act and demand removal of the claim from your credit report immediately.
Be very careful about making any payments if the debt is past the statute of limitations or about to be since that may restart the clock and you may then owe the full amount even if the collector told you that you would only have to pay a small amount and then they would leave you alone.
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Related Articles
* Will Debt Follow you Abroad?
* Restrictions on Wage Garnishment for Debt Collection.
* The Fair Debt Collection Practices Act
* Reasons not to file Bankruptcy or Settle Your Debts
* Can you go to jail for not paying your debts?
* How to settle your debts on your own
* How to deal with collection agencies
* Sample Debt Validation Letter
