True story, happened this week.
A woman applies for a home loan to buy a house. Her credit isn’t perfect, which is all right. Collections that add up to less than $2,000 can be ignored by the mortgage lender. Medical collections can be ignored. If the credit score and income qualifies, all is well.
The loan officer calls the woman back to discuss her loan application. “Hello, Mrs. (Name)?”
“Hello, hello, hello?” the woman replies, then she launches into the most foul language imaginable and hangs up. Apparently, she assumed the nice loan officer was one of her collectors calling for money.
Guess who’s not getting a Letter of Approval for a Home loan?
Even if you aren’t applying for a mortgage and you are correct in assuming the caller is a collector, you must never, ever use rude or foul language. Doing so only shoots yourself in the pocketbook.
How to Handle Collector Calls If You Don’t Owe Money
If the collector is wrong or if the account is past the Statute of Limitations for collecting money in your state, then say this:
“I am going to record this phone call. I want it on record that the reason I don’t owe money on this account is because…” Explain your reason and end the conversation by saying, “Please correct the account with the credit bureaus to show this is paid-as-agreed. I will be sending a letter to the bureaus as well.”
If you need to look up the Statute of Limitations for your state, see here.
How to Handle Collector Calls If You DO Owe Money
“Thank you for calling me to discuss this account.” (That will put them off guard! No one ever thanks them.) “My credit is important to me, but I don’t have funds to pay the entire balance. Since your company purchased the debt for pennies on the dollar, let’s discuss a settlement arrangement that would work.”
Be prepared to tell them how much you can pay.
Do NOT tell them what your income is!
Do NOT tell them where you work — or even say you are employed!
Do NOT tell them where you bank!
Do NOT agree to automatic payments or auto-debit!
If they ask any of those questions, reply with, “I am not divulging that information. Let’s discuss the settlement.”
You must never give them information they could use to garnish your wages, recalculate how much they think you should be able to afford, or get their long fingers into your bank account!!!
Keep the conversation professional. Record it if possible. Get your settlement agreed upon, and then get it in writing.
You must get your settlement agreement in writing. You cannot trust a verbal agreement.
Don’t Tell Them to Cease and Desist Contacting You
If you truly owe money, don’t tell them to stop contacting you. Why? Because if you cut off all communication, their next move might be to file lawsuit.
Better to work out an agreement than to get slapped with a lawsuit!
What If You Can’t Pay?
If you can’t afford to pay even $5 per month, then tell them why. “I’m sorry, but at this time, I am unemployed and have no money to live on. I am literally going to the food bank to feed my family. As soon as I am back to work, I will set up a pay plan.”
Always be professional and polite. Maintain your personal dignity. Be smart. Swearing and foul language only reflects poorly on yourself and sets you up for the collector to take negative action against you.