Coping with
Collection Agencies
If you’ve ever been behind in your payments, you’ve probably received a call from a collection
agent. Knowing just a few facts can make speaking with collection agents a far less stressful
experience.
Collection agents are on commission. Being a collection agent is a awful, low-paying job. If an
agent gets a debtor to pay, the agent is going to be rewarded for that.
Collection agencies buy your debt for pennies on the dollar. So negotiation is possible. Just
remember to get any new agreements in writing before you send any money.
They are going to call every day until you pay. Unless, of course, you write them a letter and
send it certified mail requesting that they contact you only by mail. You’ll have to do this every
time your account is sold to a subsequent collection agency.
Answer the phone. Ignoring the phone just makes them call back a little later. So instead of
getting one call a day, you may be listening to several on your answering machine.
If your debt is unsecured, that is, there is no collateral behind the debt, they can’t do much without
going first to court. They may threaten legal action but are they going to pay a lawyer to go to
court to get a judgment against you for a couple hundred dollars?
Your credit report has already been damaged. Your debt is never sold to a collection agency
before the original creditor has given up hope on you and has already reported your account as
delinquent. So when they say that not paying will damage your credit, don't let it intimidate you.
Don’t send post-dated checks. It is illegal to write a check when the funds are not present in the
account to pay the draft.
Be nice. Agents are used to people lying and getting angry. An bit of niceness outweighs a whole
lot of yelling. So, tell the truth. “I don’t have any money to pay the bill. I plan to pay the bill and
will send money when I am able to do so.” Don’t make excuses and don’t try to explain your
situation. They have heard all of the excuses before and they really don’t care about your situation.
Don’t make promises you can’t keep. That may get them off your back for a day or two but
they’ll be more aggressive when you don’t follow through.
Don’t make partial payments. Why bother? Doing so won’t help your situation much. You
are still very late. What you need is a full fledged plan for getting out of the situation so that you
can work out a paid-in-full agreement. If you do make a new agreement with a collection agent,
get the agreement in writing before you send any money.
Your debt may be obsolete. You need to look at your credit report. If your delinquency is
nearing the seven year limit, collectors will do what they can to get anything they can from you.
Upon receipt of even a small payment, the collection agency can report your account as “current”
thus artificially resetting the seven year clock on how long the notation can remain on your credit
report.
Learn about your rights. The Fair Debt Collections Act is a document you should read. The
Federal Trade Commission has a simple easy to read version. CLICK HERE!
