When collection agencies follow the FDCPA their agents are trained in a very specific way. They are taught to use their voice and certain societal protocols to lead you to the outcome they want, which is getting money out of you over the phone right that very minute.
They are taught to adopt a bored, matter-of-fact, authoritative tone. When they call you, it’s often under an assigned and registered alias, allowing them to set their real personality aside for a moment. They often are taught not to listen to the reasons why you can’t pay the debt. In their world, every reason is just a “stall.” They believe you have the money. They just think you don’t want to give it to them.
They’re also taught to leverage your guilt and shame about owing money. And thus, even the most scrupulous, legal debt collectors in the world tend to throw people off balance and stress them out very quickly.
But if you choose to speak to them at all (and you don’t have to), keeping these 7 points in mind, and avoiding them, may help you keep the upper hand.
1. Discuss income and assets.
A lot of collection agents will start asking very personal questions about your income and assets under the guise of “helping you set up a payment plan.” They may even call it an “application.”
And sometimes they will use the information to do that, but it serves a dual purpose.
They’re trying to find out if you have assets they can go after with a lawsuit. A job. A checking account. They’re also looking for sources of funds they can convince you to raid so you can pay them.
A payment plan is often a pretty rotten idea anyway. We can devote a whole blog post to why, but for now just keep in mind that if you can’t take care of all your debts right now you’re just throwing good money after bad.
2. Give them your work number.
They will ask, as if it’s a routine question everyone answers.
Resist the urge to give it to them. They will call and bother you at work. And it also verifies you have wages, just like answering their “application” questions.
3. Create a post-dated check or ACH agreement.
Post-dated checks are a terrible idea because there is nothing stopping the collection agency from cashing that check “early.” The date doesn’t matter nearly as much as the fact that you filled out a check and signed one. Many of them will do it too, either out of an eagerness to get your money right now or out of simple carelessness.
As for ACH agreements, you’re trusting them to abide by the payment plan instead of swooping in to take the entire amount. You’re also relying on your funds to deposit on time, and a host of other factors beyond your control.
If you’re going to pay them anything, use a debit card you have money on that day. Even collection agencies are not allowed to keep debit card information on file without your express permission.
4. Pay them a cent without getting more details about the debt.
Namely: the name and address of the original creditor and the date of your last payment.
Ideally you’re going to get this information the first time the collection agency contacts you, by mail. You would do it by writing a letter of your own asking the collection agency to verify the debt. Ask for all of this information specifically.
If the date of your last payment is older than 6 years, stop talking to the debt collector. That’s the Statute of Limitations for debts in New Jersey. They can’t sue you unless you make a payment.
If you do make a payment, you will restart the statute. And there are plenty of collection agencies out there that specialize in trying to collect, and get judgements on, extremely old debts. Don’t fall for it. If the debt is that old, it can’t hurt you anymore. Paying won’t help you anymore either, as the damage to your credit report has already been done.
See also: Are You Dealing with Zombie Debt?
And some of these debts are fake. As in, from fake companies you never took out a loan from in the first place.
5. Attempt to “settle” the debt, save in very specific circumstances.
It sounds like a great deal: “settling” the debt for pennies on the dollar. Perhaps you pay 70%, or even 60%, of what you owe. Of course, depending on what type of account it is you may have paid the value of whatever you bought about 7 times over before you ever went into default.
Here’s why it’s a bad idea. First, it doesn’t really accomplish anything other than getting them to stop calling, which you could do with a certified letter telling them to stop calling.
It definitely doesn’t help your credit: a “settled for less than the full balance” notation can tank your score.
The only time you should bother is if:
- It’s the only debt you owe (unlikely), or you have a lump sum to pay off all your debts and are just trying to save a little money.
- You don’t particularly care at this point what your credit report looks like. You’re just trying to settle your accounts and be done.
Both of these items need to be true. If you can’t take care of all your accounts you’re probably better off filing for bankruptcy.
See also: What You Need to Know About Settling Debts.
6. Forget to document the call.
Individual collection agents mess up and violate the FDCPA all the time. Documenting the call and specific abuse you receive could be the key to making a successful complaint with the Attorney General as well as collecting damages under the FDCPA.
It also helps you keep the contents of the conversation straight, keep track of account numbers and confirmation numbers, and note the details of any promises made between you and the agency.
7. Pay them a cent, if paying them isn’t going to help you.
Unless it is a single, isolated bill you just let slip through the cracks, a call from even one collection agency is a sign you’re financially over-extended. It usually means you should seriously be considering bankruptcy, not attempting to deal with creditors who definitely do not have your best interests at heart.
And if you’re going to file for bankruptcy, any money paid to a creditor is just wasted money. It’s also money that could cause some problems, as you don’t want to give the appearance of “favoring” one creditor over another.
Before you decide you should definitely think about contacting our offices for a free consultation. We can take a look at your financial situation and offer advice about what to do. And we do have your best interests at heart, which means you’re always safe when you step inside of our offices.