Debt Negotiation | How to Deal with Debt Collectors

When it comes to debt negotiation and working things out with debt collectors, the first thing you need to understand is that they are the professionals in this area. They do this for a living and hence, they know how to get what they want even if that would be detrimental to your interest. However, with a few simple guidelines, you can deal with them successfully and get them to agree with your terms.

First of all, you have to know what your rights are when it comes to third party collection agencies. What we have given above are starters. There are very good resources online or in the attorney general’s office in your state that teach you about the ins and outs of debt settlement with collection agencies. You should also read the FDCPA and the FCRA (Fair Credit Reporting Act) as these govern actions done by debt collectors. When a debt collector knows that you know what you are doing, they will less likely employ questionable tactics.

Next, always ask that your debt be validated. This means that the collection agency has to provide proof that you owe the debt to the collection agency and not to the original creditor. Failure to validate your debt will mean that they will not be able to collect it from you, that they cannot anymore contact you about the debt, and that they cannot report it to the credit bureaus. Be sure to check that the debt is not past the statute of limitations in your state. If it is, they cannot anymore collect the debt and you should inform them. If they persist, you can sue them in a small claims court.

Third, tape the phone conversations if possible. This way, you have proof of violations committed. Even if you don’t record the phone, you should still keep a record of all phone calls which details the date and time when it was made, who you talked to, and what the conversation was about.

Fourth, negotiate for a complete deletion of the negative listing on your credit report from the start. They won’t gain anything by having the derogatory item remain on your credit report after you have agreed to settle anyway. Make sure that you get that in writing before settling your debt.

Fifth, get everything on paper. Always operate under the assumption that a debt collector will not honor agreements made over the phone. Letters must be sent via registered mail with return receipt requested.

Sixth, never give personal information such as your work place or bank. This simply makes it easier for them to collect judgment should they win a case against you. In addition, never pay collection agencies using your personal check as this could reveal precious bank information you want to keep secret. Pay by money order or cashier’s check from a different bank than the one you have an account with.

Seventh, settle near the end of the month to get very good deals.  The reason for this is that debt collectors also work on commission so what they do each month will determine the added income they will get aside from their base pay. They will be in “settlement mode” near the end of each month and will most likely agree to your settlement terms.

Finally, stay calm and cool throughout the whole deal. Focus on the facts and leave your sob story out of the negotiation process. Do not allow them to pressure you into negotiating quickly as you will be more likely to miss out many critical things when you do. You are more likely to land a good settlement deal if you remain in control of the whole situation. 

You can find more information on debt negotiation  by just clicking on this link: http://consolidatedebtguide.org