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Step 1
Create a written budget for your household. Couples or people that combine their finances should set aside some time to do this together. Make sure the budget includes realistic allotments for food, shelter, utilities and other necessities.
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Step 2
Prioritize the list of payments on the monthly budget. Food should always be of utmost priority, followed by shelter and utilities. This is especially true if you have children that live in the house.
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Step 3
Take a deep breath when the phone rings. This helps you maintain a calm demeanor and think for a few seconds before you begin to deal with debt collectors.
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Step 4
Speak to the collector rationally and calmly while still maintaining a firm demeanor. They are accustomed to being berated and insulted by some customers while hearing others plea and make excuses for non-payment. A rational discussion will get you much farther than either of the two alternatives.
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Step 5
Consider your written budget and decide if you have enough money at the end of the month to make a payment. If you have enough money available, offer to make a payment. If you don’t have enough money to make a payment, simply tell the collector that you cannot afford to make a payment this month.
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Step 6
Tell the collector to refrain from calling you for at least two weeks. Explain your financial situation and even offer to send him a copy of your written budget to prove you don’t have enough to make a payment.
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Step 7
Hang up politely and go about your normal business. Make a log of the debt collector that called, including the time and the date, and write down the agreement that you reached for future reference.
Comments
foodshistorian said
on 5/7/2009 Simple: Sign up for a cellphone: 8 or 9 hours from where you live- use a local hotel as your new "address" ( send mail to a PO box-at least one town away): The creditors haven't found me yet and it's been 5 years now. My husband collects SSI and I'm unemployed. Even if they find me- eventually, there's nothing they can do.
bdwick said
on 3/23/2008 First of all, you're talking about mortgage debt. And if you'll notice, this is more about credit card debt. The mortgage payment is probably the most important payment you need to make because that involves your HOME!
Second, I never said to ignore the debt collectors. Tip #1 says to make every effort to pay your debts. I'm not telling people how to get out of paying their obligations. But if the debt collectors are rude or treat you like you're less than a person just because you think it's more important to buy food for your children rather than pay a late payment for a credit card.
And by the way, you might think being a bill collector is such an honorable profession, but many people in that profession break the law and create undue stress on people who are already struggling with their finances.
orenjidesu said
on 3/23/2008 I promise you that your lender will be glad to hear from you -- the last thing a lender wants to do is foreclose on your home. Business-wise, foreclosure isn't such a smart decision; and ethics-wise, we just want to help you. We don't want to take your home. Don't be afraid to call your lender and explain your situation, then ask if anything can be done to help. More often than not, there is a solution out there for you. The best customer who gets things done, is the customer that calls in or answers the phone when they're struggling. We want to know what is going on, we want to know what we can do to help you.
orenjidesu said
on 3/23/2008 ...dirt for not being able to make a payment. And, you may walk out of the conversation feeling a little uplifted because of the solution that is reached. Believe me; I'm on the collector's side of things. It's difficult to reach a solution when a customer is not explaining their situation, or when they're getting emotional or indignant that they're receiving a collections call. Most calls are very impersonal to the collector -- we don't know you, you don't know us, we just know that your payment is delinquent, and we want to know why so that we can reach a solution of some kind, so that the collections calls will stop. In theory, if we can reach every customer that is past due and come up with some kind of solution, then the collectors would be out of a job. The most important thing is to answer the phone, or return the messages that are left. I promise you that your lender will
orenjidesu said
on 3/23/2008 I am a debt collector, I work for a major bank. I'm a 19-year-old girl, and this job is tough for me. Some customers scream and yell and curse at me after only learning who I am and where I'm calling from, then they hang up on me. It's tough to handle sometimes. The reality of this market situation is, however, that if you can't make a payment on your loan, especially if it's a mortgage or equity payment, most banks have alternatives to making payments. Most banks will try to work with a customer to either cut interest rates or modify their loans for long-term sitations that prevent ability to make payments, or offer extensions for those temporary hardships. The important thing is, if you're struggling to make monthly payments, don't be afraid to answer the phone. Not all collectors are going to be rude; not all collectors are going to scream and yell at you or make you feel like