5 biggest mistakes in dealing with collectors

Nobody likes dealing with debt collectors, regardless if you actually owe the debt or not.  They can harass you day and night, leave messages with friends or family looking for you, and can be very intimidating.  It’s important though to keep your calm — that’s where we start our list:

1.  Lose your cool and screaming, yelling, or lying.
Lying is a big no-no.  “The check is in the mail” should even be avoided, unless, of course, the check really is in the mail.  If you choose to communicate with the debt collector over the phone, realize that your conversation is being recorded.  Any anger, lies, or “lack of character” can be used against you later.

2.  Communicate via letters, if possible.
It’s tempting to pick the phone up when you’re called repeatedly throughout the day and start making payment arrangements/settlements with a collector.  However, unless you’re able to (legally/technically) record the conversation with the debt collector, it’s simply a verbal agreement.  It’s your word against their recording, which more than likely will vanish very quickly.

So, get it in writing.  It’s next to impossible for a verbal agreement to outweigh a written one.  Make sure any letter outlying a payment agreement confirms that your payment is for X debt, and payment of X will pay the debt in full and stop any further collection activities.  You’ll also want to make sure that the agreement notes that your credit report will be updated accordingly.

Another major benefit in communicating by letters is that it allows you to keep your cool.  Think about a previous experience when you went to a car dealership and negotiated with the sales manager to get a deal you wanted.  Now, consider how easy it would’ve been doing it by letter.  Sure, it would’ve been a slightly slower process, but all commitments would’ve been in writing, you would’ve never had the ability to lose your composure, and you’d make sure you got the deal you wanted.

You’d have the same benefit with a debt collector.

3.  Give a debt collector your bank account information.
Never pay a debt collection agency with any payment method that can incur “recurring charges.”  This means your bank account, credit card, etc.  Of course, it’d be illegal to charge any of your cards/accounts without your permission, but funny thing — it seems to occur quite often.

Pay with a money order or cashier’s check.  Nothing else.

4.  Become intimidated.
They may try to appear like an established law firm with thick mahogany desks, manned by guys named Theodore Osmond III.  In reality, you’re dealing with a guy named Tucker who works in a cubicle and drives a Kia.  The point is — debt collectors are people just like you.  They have families, mortgages, watch the New England Patriots choke on Sunday, etc.

Keep this in mind when talking to them and don’t be afraid.

5.  Make commitments you can’t keep.
You got into debt presumably by underestimating the money you had going out, and overestimating the money you had coming in.  Don’t do it again when arranging to pay off a debt.  While you will be eager to pay off the debt quickly and to make the collection agency happy, accepting a payoff plan that you can’t stick to won’t help anything.  It’ll only set you back further.