When a creditor or debt collector calls, unpleasant as it may seem, it is an opportunity to negotiate. You may end up with good results. Some creditors are willing to hear what you have to offer rather than having to spend the money to file a lawsuit or initiate collection activities. Your first step is understanding your rights and options.
Debt collectors may not harass you by calling multiple times in a short period or if you have asked them to stop calling. They can't call early in the morning or late at night, and they should never lie, threaten or use profanity when speaking to you. When they obey these rules, you may feel free to negotiate.
Exercising your rights
It is common for debt collectors to have inaccurate information about the amount you owe or other details. For example, if a debt is beyond its statute of limitations for collections, you may revive it simply by agreeing that you owe the money. Before making any offers or negotiating payments, request written information about the debt so you can review it. You may also wish to research the credibility of the debt collection agency since many scam artists can convincingly imitate creditors.
You can then take the following steps that may help relieve some of the burden of the debt:
- Take notes whenever you speak to a creditor, especially if the agent is violating the law by harassing you.
- Be calm and reasonable when you speak.
- If you owe medical debt, ask the caller if the institution offers financial assistance and confirm that the institution submitted the bill to your insurer.
- Offer a partial payment in a lump sum to satisfy the debt since some creditors are willing to take some – even half – rather than nothing.
- Request a repayment plan you are certain you can manage.
- Don't be afraid to mention that bankruptcy is an option you are considering since this may motivate a creditor of unsecure debt to negotiate.
- Ask the creditor to positively report the resolution of your negotiation to the credit reporting agencies.
- Request a written verification of your agreement.
Of course, if this seems overwhelming, you can always seek advice and assistance from a legal professional who has experience negotiating with creditors. A California attorney will also have information about other options for debt relief if your creditors are unwilling to discuss a settlement with you.