Lately I've been thinking I have tinnitus, what with all the ringing my phone has been doing. The holidays set me back a bit and I'm still recovering, but we all know the banks don't give a flying fart. Sometimes I swear Mr. Visa is an oldschool mafia boss, sending his henchmen to collect by whatever means necessary. Yesterday I received 12 phone calls, 11 the day before, and they even call on Sundays. In addition to those calls I receive daily mailings and the occasional email and text message.
I don't really understand this method of collection... Of those 12 calls, six of them came from the same number. Do they think that increasing the frequency of harassment is going to make the balance of my checking account spontaneously grow? I mean, really now. Don't they think if I had the money to pay, I would have done it by now? I like to pay my bills on time. It gives me a great sense of pride to keep all my ducks in a row and my accounts out of the red and my credit score above the national average. But for some reason the banks have this crazy idea that I'm some kind of ninja-thief who will quietly slip out of their grasps in the middle of the night if they aren't calling me at exactly 8:30am every single day. It's absurd! Now what I could understand is something like a "daily reminder." Just one phone call, sometime in the afternoon, with a friendly message reminding me that I still owe them my life and they aren't going away. I could totally accept that!
However, the sad truth is that many more people respond faster and more efficiently to death threats rather than sugar and honey. While I was working at a collection agency a few years back (yes, I worked at a bank and a collection agency--the two institutions I loathe most on this planet), I remember the wealthiest collectors were the hard-asses that knew exactly how to flick the panic switch on a debtor. The kinder, more gentle staff still made their commission too, but it really is amazing how fast someone manages to pull a few hundred bucks out of the sky when they think the Iceman is going to show up at the front door with a pickax and some duct tape. So, because I worked in a collection agency (I wasn't a collector, mind you), I have a good bit of knowledge on the tactics and strategies these people use to scare debtors. This knowledge is mostly what keeps me from shitting a brick and going into panic mode every time they ring. Here's a few things I can share with you:(Legal Disclaimer: I cannot guarantee these principals apply in all situations. I am not a professional debt adviser. I'm simply just a person sharing what tidbits I've pick up in my lifetime, and any information you receive from anyone should be taken with a grain of salt and investigated thoroughly.)
- Every creditor out there will take a settlement of 80%. Any balance on top of that is usually fees and interest so they don't really mind losing the gain, as long as they are recovering the loss. Click here for some really good tips how to negotiate with your creditors.
- Always low-ball your initial settlement offer. They will want you to make the initial offer (in case you had a bigger number in mind than they did), and they will always try to one-up you. So start with 50% and make it sound like you don't have a penny more to your name.
- If you can pay in one lump sum right now, many creditors will jump to accept a ludicrously small settlement (50-60%). If you're lucky, they'll take it in two payments--hey, it worked for me before! Also note that most companies won't take less than 50%, and an offer any smaller may be taken as an insult to the collector.
- Don't freak out when you get a letter from an attorney threatening a lawsuit. Many, many companies simply throw a couple of bucks at an attorney to send a letter, and only send a letter, in the hopes of scaring you into cutting off your left arm and mailing it in immediately.
- Most creditors aren't going to sue for anything less than a couple thousand dollars. If they do decide to sue, it will be after years of harassment and exhausting all other avenues. It costs a lot of money to sue people, so it's really a last resort, Hail Mary play.
- Please, please, please don't use one of those "debt consolidation" companies like AmeriDebt, FreedomDebtRelief or any of the other thousands like it. All they do is settle your balances in the exact same ways I just told you about, except they steal more of your money in the process and drag it out longer. They sure do have some convincing commercials, but please know they are are NOT out to help you. Even worse, a ton of them are truly thieves who take your money and never even pay the companies. You can "get rid of half your debt" all by yourself just by picking up the phone and calling Mr. Visa.
Settling a debt also requires coming into a chunk a change to actually pay them with, and a chunk I do not have. I don't really want to settle anyhow, because it doesn't look too good on your credit report (but it looks wayyy better than a write-off! Write-offs are very bad, and you still have to pay them back). I've decided I want to do this the old-fashioned way and actually get caught up on my payments. I'm fairly positive I'll be able to catch up by the end of this month, at which point I'll need to sit down and really hash out a plan of action to get myself out of the red before I die. In the meantime, instead of dodging the Iceman, I think I'll pick up the phone and tell them to give me a couple weeks to get straight. Yea, that might be a good idea. ;-)
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