Dealing with Debt Collectors

Nobody likes the idea of dealing with creditors. There aren’t many collection people who are either kind or nice to me when I was struggling to pay my bills. They usually approached the conversation in attack mode which of course put me on the defensive and it seemed that no matter what my answer it was never good enough.

But dealing with a debt collector doesn’t have to be difficult, if you’re faced with one here’s a couple of tips I learned along the way that made dealing with these people a little more easier.

1. Take Personal Responsibility

The fact of the matter is that most of us end up in debt with collectors breathing down our necks because we made some bad decisions and choices.  You’ve got stop blaming other people for your financial circumstances and first acknowledge that you made this mess  and now you’ll take responsibility and start cleaning it up.

Blame is understandable; it’s almost inevitable that you’ll want to blame but don’t.  Instead forgive yourself for your past financial transgressions and keep moving forward.

Stop ignoring the calls and letters and start engaging with your creditors to come up with a plan to pay your debt.  Standing in your power in this way is worth more to your integrity than playing the hide and avoid game.

2. Be Prepared

Ok, so you’re ready to take responsibility but don’t pick up the phone without a plan.

Prior to my financial meltdown I had always been on time with my payments and never had late fees.  I did have a big balance, but I still paid each month even if it was just the minimum.  So before you call figure out what you owe, who you owe and how much you can realistically afford to pay each of them.

Try to do this before they start the collection process as creditors would rather have you pay a small amount against your bill each month than have to start the expensive collections process.

Additionally be prepared to explain the reason you can’t pay; your current income and prospects for future income; other obligations (bills) that you have; and your plans to bring this debt up-to-date and keep it current, including the amount you’ll be able to pay each month.

3.  Offer Solutions

Creditors may not willing share with you options that could solve your problem and theirs, so know before you call what options might work best in your situation.

You can reduce the monthly payment; refinance the loan; defer payments for short time if you expect that your income will increase in the near future; pay only the interest on the loan until you can resume making monthly payments or voluntarily surrender an item you purchased on credit.

Other options that don’t involve your creditor include selling items and using the cash to pay your creditors; or having a yard sale and using those funds to pay balances.

No matter what option you choose you are ultimately responsible to pay your balances to your creditors.

Remember, taking responsibility and finding a solution will ease the fear and anxiety of dealing with less than friendly debt collection agency.  Get your head out of the sand and establish your plan of action today.

Post Note:  For those considering bankruptcy, please consult a bankruptcy attorney in your area so you can fully understand all the ramifications of the bankruptcy process.