Debt Collector Advice?
I know, I know. They're just trying to play me. All the same, I solicit your elaborations on that theme and any unique things I can do in this situation other than just ignoring it.
On Saturday the guy from the collection agency trying to collect my $2400 in credit card debt used a different number to call me, so I picked up. I told him I'm employed now so I'll be able to pay him, but I was not at home so I didn't have my financial projections in front of me. I told him when I looked at the spreadsheet I could tell him how much I could save up by what dates, so he could take it to the client to see if they'd accept it as a settlement. How much they get depends on how long they're willing to wait. He told me to call back with that info.
When he asked who I work for, I told him, which may have been a mistake. However, I gave him the name of the company which is my workplace. That company is the client of my real employer, the temp agency, and I get my paychecks directly from the temp agency. If they garnish my wages, they'd have to do it from the agency, whose name they don't know. The cost of legal fees to go through the court system to garnish my wages is probably more than the actual amount I owe.
Today I called back as agreed, just because I'm the kind of guy who acts in good faith. My call was diverted to this guy's (alleged) supervisor. I told him what the other guy and I had agreed. He told me he was refusing my settlement schedule, and that the only offer on the table is for me to pay today or tomorrow (bull), and that unless I got a friend to pay it by credit card during that time I would be listed as a refusal. When I said that's not going to happen, he said good luck and hung up on me. I'm sure they have an entire script for this, and that anyone who gives them a call back must be weak and afraid, hence the good-cop bad-cop act.
I'm sure he's actually a smart guy who deals with stupid people all day. Because he is smart he has learned that if he puts a sock puppet on his hand and has it recite statements, those statements will get him what he wants. Never mind that saying "if you think you can walk away from this, you're wrong", to a guy who had just picked up the phone and initiated a call to him, is a dumb statement; reciting it must be efficacious in most cases. They know I want to give them their money. But from their perspective, what does it cost them to go ahead and hassle me until then?
Comments
sandygood on Sep. 24, 2007 2:16 PM
Hi Matt,
I just recently watched a documentary called "Maxed Out". Very eye opening regarding the practice of these sleazeball collection agencies, and credit card companies. You should be able to rent it from block busters if you'd like.
Also, I recommend listening to Dave Ramsey. Go to www.daveramsey.com. He is great to listen to, and offers great financial advice! I believe that he has said that as long as you send the collection agencies what you can, and then provide an explanation that they are unlikely to take action against you. He has pod-casts on line that you can download, and you might even be able to call his show to get advice on this.
I think that they're just trying to bully you so that you will do something rash! Just keep your head and stick to your plan. And good luck, Matt!!!
matt-arnold on Sep. 24, 2007 3:32 PM
My parents are a big fan of Dave Ramsey. They took all their kids, including me, to his seminar a couple of years ago. That's where I got my three step plan of debt elimination, emergency fund, and reliable used car.
The one place where his advice was not able to help me was that he seemed to imply that I should only think about my outgo, not my income. I think a lot of people get that wrong and only increase their income when they should be reducing their outgo, but he didn't mean that for all cases. In my case, I had no expenses left to cut and the only solution was to get a job that pays enough to live on.
uplinktruck on Sep. 25, 2007 8:22 PM
Just rented and watched Maxed Out. With the exception of some non-credit related Bush bashing and a really long reach at Katrina victims, it is most excellent. The credit related Bush Bashing is accurate and I agree with the producers.
The documentary is dead on accurate where credit is concerned.
tlatoani on Sep. 24, 2007 2:22 PM
In future, I wouldn't give them any information about your employer. Some of them will apparently call your work incessantly to get you in trouble.
uplinktruck on Sep. 24, 2007 7:01 PM
They better not. Allow me to quote from the Fair Debt Collection Practices Act:
_TITLE VIII - DEBT COLLECTION PRACTICES
§ 805. Communication in connection with debt collection [15 USC 1692c](a) COMMUNICATION WITH THE CONSUMER GENERALLY. Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt --
(1) at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer. In the absence of knowledge of circumstances to the contrary, a debt collector shall assume that the convenient time for communicating with a consumer is after 8 o'clock antimeridian and before 9 o'clock postmeridian, local time at the consumer's location;
(2) if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney's name and address, unless the attorney fails to respond within a reasonable period of time to a communication from the debt collector or unless the attorney consents to direct communication with the consumer; or
(3) at the consumer's place of employment if the debt collector knows or has reason to know that the consumer's employer prohibits the consumer from receiving such communication._
Matt, when you fire off that letter to the vultures, you need to make it clear that you are not permitted to receive outside phone calls.
One other thing I forgot to mention below. When you send mail to the collection agency send them two copies of each. One priority mail with delivery confirmation, the other registered mail return receipt requested. That is the one that requires a signature.
Even if they refuse to sign for the registered one, you still have proof they got it.
avt-tor on Sep. 24, 2007 2:25 PM
Call display. Don't answer the phone for anybody you don't want to talk to.
Don't be creative or clever. At most, you'll piss them off and move higher on their priority list (i.e. get called more often). Send money to your actual creditors when you can.
Being in debt is horrible, but there's no reason to let other people own your life and free time.
matt-arnold on Sep. 24, 2007 3:34 PM
Oh, you mean a whitelist instead of a blacklist? I'm hesitant to do that, since I would hate to miss the call of a new person who I might want to talk to. But I suppose they can leave a message. Good idea, thanks!
uplinktruck on Sep. 24, 2007 6:53 PM
Sending money to the actual creditors may cause the money to be either returned or lost. The collection agency bought your debt from the original debt holder. At best you delay the payment process as they might forward the payment to the collection agency. At worse, they may apply the payment to the difference in what you owed and what the collection agency payed for your paper.
zifferent on Sep. 24, 2007 2:55 PM
There's always credit counseling, but I usually would only consider that as the next to last step to committing bankruptcy as they tend to take more than their fair share for their piece of the pie.
Alternatively, it sounds like you're good at negotiating and are financially organized enough at the moment to be able to negotiate directly with your debtors, rather than dealing with asshole collections agencies. I'd bet there are resources on the internet for doing just that, and then you could use the otherwise credit counseling "administrative" fee to pay down the debt faster.
amanda_lodden on Sep. 24, 2007 3:15 PM
Credit counseling often does worse things to your credit rating than bankruptcy does, simply because bankruptcy remains an option afterward. If you can negotiate on your own, it's better to do so. Also, be aware that some credit counseling agencies are run and/or funded by credit card companies, so they will counsel you to pay your credit cards first, above other creditors, regardless of whether that's really your best option or not.
One thing you may want to consider, even though it goes against your nature: save up money until you have a good chunk, and THEN offer that chunk as a settlement instead of a payment plan. Credit card companies don't want to lose their investment (i.e., the charges you actually made that they paid the merchant for), but they're usually more willing to negotiate on the profit (i.e., the interest that's been piling up on those charges you made). With a payment plan, they still risk the investment, because there's no guarantee you're going to make the next installment. Plus, the interest still accrues.
If you're stuck dealing with the collections agency, learn a bit about how they work so you know what they're looking to get out of it (other than the obvious: "money"). My knowledge here is sketchy, but I know that there are two general types of collection agencies. One type works on a "finder's fee", where the debt remains with the initial creditor and the collection agency gets a cut of what they collect. The other type works on "factoring", where they buy the debt outright for pennies on the dollar. Which you have, I have no idea.
matt-arnold on Sep. 24, 2007 3:37 PM
Now that I'm well-employed, I'm miles away from needing credit counseling or bankruptcy. I have no reason to do either of those, because I know precisely when I am going to pay off this debt, in the next two months.
dawnwolf on Sep. 24, 2007 3:27 PM
Under Michigan law you have the right to tell them they are not to call you but to communicate with you by mail only. Of course, that law was enforced back when we had a Democratic Attorney General; Goddess knows whether Mike Cox thinks his constituents or the special interests are actually his boss.
uplinktruck on Sep. 24, 2007 6:50 PM
Give us a break, Dawn. Jeeeeze!
dawnwolf on Sep. 24, 2007 9:59 PM
Give *me* a break. This is the man who has done everything in his power to appease the Christianists by denying domestic partner benefits to public employees. Given his abeisance to that particular special interest group, I'm well within the bounds of reason to wonder which others he belongs to.
uplinktruck on Sep. 25, 2007 12:09 AM
His subjective moral views on the gay community have no bearing on how he will handle a collection agency operating outside the law. Especially since those rules are covered in such precise terms in the Federal book of Laws.
users on Sep. 25, 2007 2:13 AM
I fail to understand what this has to do with his ability to deal with collection agencies? Elaborate?
uplinktruck on Sep. 24, 2007 6:49 PM
Matt, you are in an adversarial position. Alas, your decision to reveal where you work was not a good one.
First words of advice: [b]Do not tell them anything!!![/b]
Keep always in your heart this person is not your friend. Their job is to get ammunition to use against you with the goal of separating you from your money. No matter how much they threaten, whine, posture, promise, make like your friend, offer to introduce you to their finance manager, or whatever fantasy they put forth, giving them information can only hurt you.
[b]The following is extremely important![/b]
Next time you talk to them, you need to tell them your temp job ends at the end of the week. Or tell them the job plain and simply did not work out and they are going to have to wait longer for their money.
Or better yet, tell them you will be getting more money as you dumped this job to go work as a scab at an auto-plant.
Tell them anything to throw them off the trail of this present job.
I'm not certain how well you know and get along with the HR people who's name you gave. They can legally say you do not work for them. However, without a heads up, it is not too much of a stretch to have the HR person tell anyone calling for a "credit check" who you do work for.
Do not feel bad about lying to these slime balls. They will tell you almost anything to rope you into paying them.
[B]Why this is a problem[/b]
If the collection agent knows where you work, they now have a place to serve papers on you. Once you are served, they can sue you. Unless something really unusual is in play here, they will win.
Once they have a judgment against you and you cannot write a check for the full amount on the spot, they would be fools not to ask for an execution of judgment. The judge will grant it, almost by default.
That little trick allows them to issue court rubber stamped paperwork allowing them to attach all but minimum wage from your pay check, seize entire bank accounts and even cause the sheriff to drop by your house to collect personal items for sale at auction. (That includes computers and no they will not give you time to wipe the hard drive.)
The garnishment of wages is most likely. Bank account garnishment is a close second. The last part about seizing personal property is last resort rare behavior, however it can and does happen depending on the amount of the debt.
[b]General advice[/b]
They may try to get you to come into the office to sign a "payment agreement." Don't do it. You could come in only to have them hand you civil suit papers.
Don't sign anything they send you.
Don't accept any certified, registered or return receipt requested mail.
Go to this address, http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm and study it until you understand every word.
This address, http://www.pueblo.gsa.gov/cic_text/money/fair-debt/fair-dbt.htm explains some of the law in English. You should study it as well.
Get a post office box. The physical address you give to the post office should not be the address you can actually be found at. Use a friend's address. That way they cannot use the information to get you legally served.
Compose a letter to the collection agent. If you are within the 30 days, dispute the claim. If nothing else, dispute the amount and the way he interest was calculated. Even if you are not within the 30 day dispute period, demand a written accounting and verification of the debt.
Either or both of these actions will stall the collection procedure and possibly allow you to start saving toward sending them a partial payment.
Establish a separate checking account specifically to pay collection agencies from. This needs to be in a completely separate banking company from the one you currently use. A separate branch of the same bank will not do the trick. If you write a check from your current account, the evil bastards will know where to serve garnishment papers.
There are many more tricks to dealing with these folks. I got my education when I had a heart attack and died briefly. The health insurance company died the next month. Alas, it did not come back to life.
Drop me an e-mail and I'll send you my phone number. I'll be happy to pass along the education I received at the college of hard knocks.
matt-arnold on Sep. 24, 2007 7:46 PM
What do you think are the odds that they will pay all those lawyer's fees and court costs to get a mere $2400 that they have a good reason to expect me to pay one month from now? Is the rubber-stamping really that cheap?
As for bank accounts, I don't have one, actually.
uplinktruck on Sep. 24, 2007 7:57 PM
The odds are excellent.
That is because you agreed to pay all costs when you signed your credit agreement. I strongly recommend you drag it out and read it.
You should find a bit in there about what happens if you default on the account. It will cover default interest rates and almost certainly has words to the effect that you agree to cover all attorney fees, court fees and costs associated with collecting your account.
rmeidaking on Sep. 24, 2007 6:51 PM
The first thing you do is get everyone's name, first and last name. Get their address; tell them that a PO Box won't work, you have to send them a money order, and you're going to be sending it via registered mail or FedEx, you aren't sure which. Tell them you don't make electronic payments.
DO NOT give them any personal information. You should not have told them you were employed.
If you make so much as a $10 payment, they then are not supposed to contact you for some period of time; it was 30 days in Illinois, but I'm not sure what it is in Michigan. You can tell them not to call you; that you will only respond to written communication, with written communication.
*They* want *your* money. Don't forget that. They think they will get it faster by harrassing you, because you'll pay them in order to get them to go away. I would start sending them $10 per week via money order. They'll have their money in ten years, and you'll have a valid track record of making diligent payments.
uplinktruck on Sep. 24, 2007 7:26 PM
They do not have to accept any partial payment. Nor does acceptance of a partial payment stop collection efforts.
There is a popular but untrue myth that says if a collection agency accepts a partial payment of any amount, no matter how small, they cannot sue. That is untrue.
If Illinois has a do not call after payment law, then it is local to Illinois. Michigan may not have anything like it on the books.
matt-arnold on Sep. 24, 2007 7:49 PM
According to my math, ten dollars a week would be a little under five years, not ten. But I don't see why I should prolong this unnecessarily. I like the idea of calling myself a debt-free person, so I'd like to go ahead and just pay this off next month like I planned to.
uplinktruck on Sep. 24, 2007 8:11 PM
Just for grins and since you have nothing to lose and everything to gain, call the original credit card company. Ask to speak to the collections department. Tell them you are prepared to pay the debt in full plus reasonable interest.
Explain that you lost your job, but are now working free lance and have have the resources to pay them. Tell who ever you talk to that you are unhappy with the collection agency's tactics and abusive nature.
Ask if they would pull it back from the collection agency and allow you to pay them directly. Tell them you would like to keep the collection account from showing on your credit record and are not really fond of the idea of giving the sneaking lying bastards any of your money.
Do a little begging and pleading, you may have to offer to pay the current balance and then catch the interest up. Suggest that you are trying to re-establish your credit rating after the job loss.
The worse that can happen is they can say no. And keeping collection accounts of the credit report is always a good thing.
rmeidaking on Sep. 24, 2007 8:23 PM
http://www.ftc.gov/bcp/conline/pubs/credit/fdc.shtm
This is what the Federal government has to say about the situation.
I agree that you should pay the debt ASAP; delayed payment is a way of prolonging *their* agony.
uplinktruck on Sep. 25, 2007 12:18 AM
Great web site. I'm adding that to my collection.
atropis on Sep. 24, 2007 10:24 PM
a friend of mine had the dubious fortune of working for a collections agency a while back. from what he tells me, the name of the game is high pressure sales, except nothing but fear is being sold by most of the collections callers. the name of the game is to make *their* collections agenda *your* priority, often by being generally abusive. as i understand it, there isn't much they can do unless they know where you live. yes, it *does* make more sense to play nice, but often the collections agent's numbers look better if he/she just acts like a bully. (makes one want to sue people like that for harassment. biznotches.)
drkelso on Sep. 25, 2007 4:17 AM
Dawnwolf was right. You can request that they not call you and then they can only send you mail. That will head off the awkward work phone calls.
I would say call them back, ask for a hefty discount along with a payment plan, and when they give you a hassle, tell them they have the choice of taking some money or you won't be talking to them again and they won't be allowed to call you either. Put the pressure right back at them.
I work as a contractor at a bank just one cube row over from the collections people. Very rude indeed. It's funny listening to it but I know it isn't funny to the people they talk to. Because of how they are, I'm never doing business with them.
uplinktruck on (None)
uplinktruck on Sep. 25, 2007 2:38 PM
"Dawnwolf was right. You can request that they not call you and then they can only send you mail. That will head off the awkward work phone calls."
Keep always in your heart that you have to do that in writing. Verbal commands like that do not work.
"I would say call them back, ask for a hefty discount along with a payment plan, and when they give you a hassle, tell them they have the choice of taking some money or you won't be talking to them again and they won't be allowed to call you either. Put the pressure right back at them."
Interesting plan, but with one major flaw. Keep always in your heart these bastards can sue when ever the mood suits them. They don't even have to write you a letter first.
Best not to poke the beast with a sharp stick while you are vulnerable.
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