In today's hectic world of credit confusion, creditor collection tactics and the onslaught of bills
that we cannot pay, we realize that some creditors are also in the same boat. So, maybe by putting
yourself in your creditor's mind, there could be an avenue in which to satisfy this nagging debt. Chances
are you are reacting to a phone call from some collector.
Now, in this endeavor, it is very important that you DO NOT take anyone's word for anything. Remember,
they do not know you, do not care about your personal circumstances, they are ONLY seeking money.
When you realize that most of the collectors are folks that are totally a different breed. When you go
to work for a collection company, I don't think that "compassion" is one of the requirements on the
personality quiz. In fact, I firmly believe that these companies look for "hard" people.
You can go into a lot of detail about what makes a good bill collector, but that would mean writing an
epic. Just remember that the mortality ratio in the collection industry is extremely high. Who can
stomach giving grief and using dubious tactics, insulting people and exhibiting an "I don't care"
attitude.
Back to the guidelines. Now that you have formed a mental picture of "who and what" you are dealing
with it becomes more defined as to how to embark on this task. IF, the collection agency does not own the debt, they are working for commissions. In your
plan, always try to make a settlement at the end of the month. NEVER on the first of the month.
The quota and bonus system is usually in effect and that motivates the collector to pursue volumes of
dollars and get is as quick as you can. Knowing this, you can usually make much better deals. Once a debt
has been charged off, the original creditor has invoked the IRS ruling that "allows a business" to write
off the debt from his gross income. Hence, if he has income of $150,000 and charge-off debts of $50,000
he only pays his corporate taxes on $100,000. So, even though it is a loss, he is still afforded that
ability from the IRS.
There is a little bit of irony in negotiating debt. The morality issue comes up. A lot of folks are
from the old school that says " if you owe a bill, pay it". We are also from that old school. BUT, when
someone is charging usurious interest rates, we begin to wonder where their morality was. So, in my
opinion, negotiating a debt down has nothing to do with the amount that is owed. If, I bought a washer
for $750 and financed it, I know that I would be paying more in interest than if I had the cash. But,
after losing a job, or health issues, I feel very honest about wanting to pay off the amount of the dryer
(less any money) previously paid on it.
I know of a lot of creditors that would be happy just to get their costs out of a deal and go on to
another project. Getting caught up in these high interest situations gives you the arena and potential to
settle at your terms.
It is important that when you travel this road of negotiating and settlements you follow these
guidelines.
1. Negotiate at the end of the month.
2. Negotiate under YOUR terms and conditions.
3. Never commit to payment on a specific date.
4. Get everything IN WRITING, otherwise it is hearsay
Now, this should help you to start to reduce that pile of "nasty letters" and make life more
enjoyable.
