How to Negotiate With Debt Collectors

This is a guest post by Luke McCann. You can also write a guest post about getting out of debt.

If you have found yourself in the unfortunate position of being past due on several debts, including credit cards or small bank loans, knowing how to effectively communicate with a debt collector over the phone is essential to finding a new path to become debt free. By educating yourself on how collection agencies operate and what debt collectors can and cannot tell you, you can save yourself money and heartache as you work your way out of past due status.

Types of Debt

The first step to be able to communicate with a debt collector effectively is to know what type of debt you have. If you just pay the minimum payment to every debtor who calls you and you never ask what debt it is, how much the balance it, you will never get out of debt! By finding out what type of debt you own and where it originated, you can then think back to what it was you purchased. This is important; it will allow you to reflect on how big the debt has grown to that started by buying items that you probably don’t even view as valuable today. The truth will probably make you very mad as it sheds light on thousands of dollars that has been wasted.

Debt Timelines

Once you have a firm understanding of how many debts you have in your name and how much you owe, you should start asking questions to the debt collectors when you are getting calls. How many months past due is the debt? How much is it to bring it to a current status? How much of a late fee has been added each month? What is the current interest rate? All of the questions will allow you to get a better understanding of what it will take to get out of debt. When you are communicating with the debt collectors and asking the questions, have them wrote out and write down each answer. By doing this, you have a record yourself and also you will make sure you will get answers for each question you have. If you don’t write them down, you will forget to ask some.

Score Some Reduced Fees on Your Debt

After having the full understanding of your debts, you should ask the debt collectors about any hardship programs they may have. Often times, debtors will offer to waive fees off an account for a sizeable payment. Also, they will offer reduced interest or zero interest on the account for a certain time period (6 months to 1 year) as long as payments are made on time each month. Don’t be happy with just paying payments after payment and never getting a reduction in the balance owed. Many times they will work with you; you just have to ask in a kind way.

Keep Track

Creating documentation is a great way to stay on top of the debts and keep a better understanding. My suggestion would be to get a notebook, create a page for each debt you own and keep up with each conversation you have with the debt collectors. Each time you talk to somebody, ask the name and agent ID. This will be handy because to be honest, debt collectors typically will not stay at the place of employment long and will say anything to get a payment. You can’t trust a debt collector very much, so just keep that in mind when something sounds too good to be true.

Negotiating is About Building a Rapport

At the end of the day, you want to get out debt as quickly as possible. Sadly, debt collectors have a reputation for not telling the truth and promising the world for a payment. Make sure the debt is yours, but also remember the debt collectors are doing a job and they also deserve to be treated with respect. Never lose your temper; always stay respectful and you will get much further with a debt collector. Remember, if they could find another job, they would be doing it rather than calling you over a debt. Understand, sometimes they may not be able to help you out and you will just have to pay the entire debt that you owe. By communicating effectively, you will be able to create a effective plan to pay off your debt and typically save a ton of money in the process.

Do you have any experience in negotiating with a debt collector?

Luke McCann has worked in the debt collection industry for over a decade and has experience in connecting collection agencies with small business owners to help to reduce accounts receivables. He currently owns DebtCollectionQuote.com which provides up to date information on the debt collection industry.

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