At the time I did not know how to handle the angry collectors and I wanted to do the right thing. But how can you negotiate with some one that really has nothing to lose?
Here area few ideas that worked for me. (Make sure to check the video from CBC Marketplace on Debt Debt Collector Dread the bottom of the post)
Set Your Priorities (You have to eat)
No matter what you creditors say you have a the right to eat, pay rent/mortgage, heat your home, before you pay your creditors.
Creditors can be very persuasive but you can only pay them with what you have. Even if it is only 5 dollars a month, creditors cannot refuse payment.
Maintain Contact (Go on the offensive)
It is up to you to contact your creditors. If you want them to stop calling you … you call them. Get their name and direct line, and follow up at least every two months.
Send them a copy of your actual budget and income statement via registered mail. Then call them to see if they received it. They don’t like this but it makes it harder to ask for something you don’t have.
Make them an Offer (They can’t refuse)
Although you are obligated to pay your debt in full, most creditors are willing to take less if you can make a one time lump sum payment. Some times 30 or 40% what you owe
Sell your second car, or pawn your classic movie collection or get a second job. Scrounge up all the money you can and make them an offer.
Get it Writing (Or you will regret it)
If you are making payment arrangements make sure to send these arrangements in writing with your budget. If you only do this over the phone they are bound to call you anyway. Many times once you make the arrangement on the phone the agent on the phone will pass your file to someone else in the office.
If you are able to make an offer DO NOT pay until you receive a fax or letter on the credit companies letter head with the amount agreed and that the debt will be cleared once payment is received.