How to Talk to Debt Collectors and Gain the Upper Hand

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call centerIf you want to know how to interact with difficult debt collectors, this information is for you. In this article, you’ll learn what powers debt collectors have, what to say to them on the phone, and how to negotiate with them. After reading this information, you’ll discover that debt collectors are more like paper tigers than fire breathing dragons.

What Powers Do Debt Collectors Have?

The rules and powers relating to debt collectors are spelled out in the Fair Debt Collection Practices Act (FDCPA). While the law allows debt collectors the right to sue for collections and negotiate settlements, it contains a lot of statutes that are intended to curtail abuse and harassment of consumers.

It also makes it clear that if debt collectors fail to adhere to the rules, they will open themselves to civil lawsuits. I invite you to read the law, but you should rest assured that you do have rights, even though collectors will try every trick in the book to circumvent them.

What to Say to Debt Collectors on the Phone

The first thing that you should know is that you’re under no obligation to speak with a debt collector when they call you. There is no law that requires this. So, if you hang up on them, you’re not going to see black helicopters circling your home.

In fact, you can ask them to stop calling you, and by law they must honor your request. You can learn how to do this by reading our article called How to Fight Debt Collectors and Win.

So the real question is, “Should I speak or negotiate with a debt collector at all?” This will depend on if you have the money to pay the debt, if the amount owed is accurate, or if the balance due is even legitimate.

Let’s assume that you owe the money that the collector is attempting to get, but your financial situation is in dire straits and you just don’t have any extra cash to pay out.

When your finances and life are in such turmoil, you should never engage in a long discussion with a debt collector on the first call. That’s because you may tell them something that can be used against you down the road.

Instead, if this is their first contact with you, as per section 809 of the Fair Debt Collection Practices Act, ask them to send you a written letter that verifies the amount owed, name of the creditor, and your rights. Ask the debt collector to also mention any additional charges such as interest and fees.

Please note that if you receive the letter and it shows charges that you never expected, keep in mind that they may have been defined in the small print of the contract you signed. So pull it out and review the details.

Now, the reason you should ask for a verification letter is because the biggest complaint received by the Federal Trade Commission is that many debt collectors inflate the true amounts owed.

How to Negotiate With Debt Collectors

Of course, there are many variables at play when negotiating anything. Much will depend on the amount of the debt, tenacity of the debt collector, the amount that you think you could actually pay, and your own negotiating skills.

But make no bones about it, debt collectors want to be paid as fast as possible. This is an incentive that could work to your advantage.

Keep in mind that the debt collector knows about the specific debt, but they probably don’t know things such as your annual income, employer, and bank account information. And for goodness sake, don’t even think about sharing this sort of critical information with them. If you do, I’m coming to your home and hitting you over the head with a big stick.

I say this because when it comes to negotiating, the debt collector is going to ask you every question they can think of about your assets, income, living expenses, type of car you drive, etc. They want to find the hot buttons that will lead you to pay off as much of the debt as possible. They have sharp negotiating skills and you probably don’t.

If you are of a mind to negotiate with the debt collector, then consider having a consumer law attorney or professional credit counselor handle it for you. Also, if you start mentioning the “B” word, the collector may be very willing to settle for a lot less. No, not that B-word. I’m talking about “Bankruptcy”, silly.

How Long Before Debt Collectors Give Up

There isn’t one set answer to this question. For any given amount of debt, one collector may threaten you for three months and another could continue the harassment for nine months.

But having said that, if the amount of debt is very small, most collection agencies will move on to bigger fish very quickly. After all, time is money for them.

So do you feel like you can breathe a little easier when a debt collector calls? You now know that there are laws to protect you. In addition, you’ve learned a few tips on how to speak with them on the phone and negotiate a settlement, if you choose to go in that direction. Now you can go go forth with your head held high and deliver some body blows of your own to any debt collecting scumbag.