It is crucial to have a good credit in the time of economic downturn. If you have applied for mortgage loan then a good credit would help you to fetch the loan at lower interest rate. But circumstances leads to such challenging times that we fail to repay the loan within the stipulated time frame. This is one of the major reasons for a delinquent account and during this time we generally negotiate with the creditors to lower the outstanding balance as well as the interest rates.
The consumer brochure on Fair Debt Collection from the Federal Trade Commission would help you to get a vivid picture of the collection procedure. The National Consumer Law Centre distributes free consumer brochure on collection practices. You can also contact the Attorney General’s Office in your state as the collection laws varies from state to state.
You should be aware of the following things before negotiating with your debt collectors :
1. Calculate the Amount You Have to Pay
Calculate the amount you can pay to the creditor. Do not come to a negotiation that you cannot afford. Try to avoid sending post dated checks to the creditor. Automatic electronic payment from the checking account can be dangerous so you should avoid it.
2. Avoid Giving the Creditor Your Personal Details
Do not give the personal details why you are unable to pay off your debts. They won’t be sympathetic towards your misery. As debt collection is a part of their job you won’t be able to mold their feelings for you. So don’t reveal your office address or bank account number to the debt collectors even by mistake.
3. Stay Focused
The debt collectors might agitate you and force you to be impatient throughout the negotiation process. So ensure that you are calm and focused to crack a good deal with the debt collectors.
4. Record the Call
If you record the conversation with your debt collector it might fetch you a beneficial result. This record would act as a proof in Attorney General’s Office if you think of lodging a complaint against creditor harassment. However, you should know that a few states allow you to secretly record your telephonic conversation while others permit to record the call only with the consent of the other party. Therefore, if you threat the debt collectors to record the conversation then it would force them to behave decently.
5) Maintain a Record
Maintain a record of all collection calls as well as collection letters. Keep a note of the date and time of each call. When collection agencies give you a call ask the name of the agency and the employee number of the caller. If you have negotiated with the creditors regarding the payment plan then get it in writing. A Certified letter should be sent to the creditor stating the payment plan. It would act as a proof of your correspondence with the creditor. As the letter gets delivered to the creditor you would receive a receipt that needs to be filed.
Negotiating with the debt collectors can be a pretty tricky thing. So remember what you have read for a smart debt negotiation.
