So you’re in debt and the debt collector is calling. If you are reading this you are probably stressed out, worried, not sleeping well and most certainly freaked out.
When dealing with the debt collector you’ve got two choices. You can either be scared or you can rob them of their power and deal with the situation in a open and honest way. So let’s get you out of that fetal position and back to enjoying life again, even if you are getting collection calls.
The 10 Best Ways to Deal With the Debt Collector
(in no particular order)
- Don’t Fear the Call – A debt collector is going to most often reach out to you by telephone once sending you first class mail does not produce the desired response, payment. If you dodge the calls they will try to find you by calling references you listed on your loan application or neighbors. You don’t want that to happen so don’t dodge their calls.
When they do call they are asking you for money because that is their job. It’s not a personal attack against you. It’s just one person being paid by a company to call you because that’s their job. Being mad at the debt collector is like being mad at the violinist playing in an orchestra. It’s just a person doing a job.
- Don’t Let Yourself be Manipulated – The only way a debt collector can manipulate you into feeling really crappy if you let them. So don’t let them.
If you can’t pay right now it’s a reality. You can’t pay. It is what it is.
The collector is going to try to scare you by saying they will take legal action. Well the agreement you signed and the laws of the land always gave them those options if you could not pay so don’t be afraid of it. If they want to take you to court they have the right to.
Think of it more as a process than the worst thing you’ll ever experience in your life. Watching Kangaroo Jack more than once is probably a much worse fate. If the collector takes you to court and you just can’t pay then you may have to look at solutions like bankruptcy to deal with all of your debt and give you a legal fresh start.
- Instantly Take Their Power Away – The best way to neutralize the debt collector is just to flow through the process with grace. If they threaten you by saying they will sue you if you don’t pay then just say you understand. If they try to call you a loser, just chuckle and thank them for one observation of the situation but you disagree.
The collector has no power over you if you agree with them or acknowledge the reality of the situation.
Collector: Mr. Smith you are not paying you bill you owe us. Why not?
You: My hours have been cut and I don’t have the money right now to pay.
Collector: You do know you owe us this money and we may be forced to sue you.
You: I recognize you have a process that you must follow. But I can’t afford to pay right now. Is there anything else?
- Be Honest – When a collector calls just be honest about your situation. Let them know what is going on right now that is preventing you from making your payments as agreed. If you’ve had your pay or hours cut, tell them. If you’ve had a sudden illness or other reason that has interfered with your ability to pay, share it with them.
It won’t change the fact you can’t pay but ii will help to put the moment into context and rather than letting the collector think you are maliciously not paying, explain why you can’t pay right now.
“Jane, I can’t pay right now because I was recently in an auto accident and lost my spleen. As soon as I get on my feet I’ll work out a repayment plan. But for now I’m just trying to get back to work.”
- Ask for Help in Repaying – If a collector is calling they want you to pay, so ask them for a repayment plan you can afford to allow you to do just that. Nearly all creditors offer special reduced payment on interest rate terms to help you repay. Check out my DIY Credit Counseling section for examples. The collector is going to push you for full payment at first but they do have plans they can offer.
Just don’t over-promise to make a payment you can’t afford. If you do and then miss the payment the collector will use that against you and come after you harder. Only promise to make a payment you can afford and stick with it. And while you are making payment promises don’t over-promise to pay one creditor more than you can afford when taking your entire situation into consideration. You may want to download my free ebook, “Eliminate Your Debt Like a Pro” for some help on developing a plan.
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- Don’t Fear Your Credit Report – Your credit report should contain a true and accurate reporting of your credit history. It’s much like a report card. If you struggled in college chemistry, like I did, and get a D then it just is what it is. Seriously, don’t you think the advisor could have told me there was a lab I needed to schedule to go with the class? More importantly, how did I not see that?
If you are struggling to make ends meet right now then it will be reported on your credit report. But it’s not the end of the world. Once you get back on track and your payments are on-time your credit score will climb again. Thank goodness for that A in Photomicroscopy I got that semester. It helped bring up my D.
- Smile – Make the Collector Your Friend – Debt collectors deal with confrontation all day long. Once I was in a national collection center and there was a security guard at the door. I wasn’t sure if the collector was there to keep people out or the collectors in.
Rather than just be another confrontation, smile instead. When I lived through my tough times I actually became very friendly with one collector that was calling me in. He went from being mean and aggressive to a friendly voice. I still could not pay but it wasn’t stressful anymore when he called.
The irony is that when I later started the credit counseling group I often called him to ask for advice on how to deal with some collection situation on behalf of a client. He was a great help.
- Don’t Take Flat Out Abuse – A bad collector may try to bait you into a confrontation. Don’t let them. If you feel you have tried to be communicative, cordial and kind and the collector isn’t listening, just let the collector know you need to end the call now, say goodbye, and hangup. You don’t need to wait for them to finish their vile tirade.
- Honor Your Repayment Deal – The collector is measured on how many “promises to pay” they can get from consumers. They are going to push you for some repayment promise but if you make one, make sure it is one you can meet.
If they want $100 a month but all you afford to pay is $20, then don’t promise more than what you can afford. If you do and then don’t make the payment you promised they will use that against you as proof you don’t what you say you can do.
- At Least You’re Not on Fire – Let’s put this all into perspective. Getting collection calls is not fun but their are much worse fates. I favorite mantra of mine is “At least I’m not on fire.” You’d be surprised how good every day looks when you compare current events to being on fire.
Damn, I dropped that full jar of pickles and it shattered all over the floor, we’ll at least I’m not on fire. So you can’t pay your bill right now and a collector is calling, at least you’re not on fire.
When you look at it in that context, getting a call from a collector hardly compares to other things in life that could be much worse. You got a call from a collector, you were not stabbed in the eye, you didn’t get hit by a bus, and you’re not on fire.
And let’s not forget that it’s just a bill you owe, it’s not the end of the world, it’s not going to kill you, and you are not a loser.