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How to negotiate with a debt collector


3rd Dec 2019 Managing your Money

When a person or a company stops paying its debt instalments, the lending company does not deal directly with them. Instead of pressuring the borrower themselves, they transfer the case to a debt collector.

If you have found yourself in such a position where you are not able to pay your debts, it can be very tricky to deal with debt collectors. You can always try to negotiate with them according to your financial situation, so it is fairly possible to reach a middle ground. Let’s have a look at a few tips that can help you negotiate with debt collectors.

Think Like Debt Collectors

When you are dealing with a debt collector, the first thing you need to understand is how they work. Make sure that you do not have any dispute with the actual lender over how much money you owe. Sometimes debt collectors try to add penalties in debt to scare people. Their goal is to make you pay as soon as possible. That is why they try every trick in the book. They can call you over and over and can write you letters, but they can’t enter your house to collect the debt. It is always better to pay the debt collectors as soon as possible as it can help you avoid a lot of inconvenience in future. Having a debt in your credit history can look really bad on you.

Be Aware Of Your Rights

Before interacting with a debt collector, make sure that you know your rights. Debt collectors have certain ways of tricking and scaring people. They can easily manipulate you into paying extra amount as they are far more experienced than you. Be aware that debt collectors have no right to harass you or use foul language while speaking. They are also not allowed you to threaten with an action that is out of legal bounds. They are only allowed to contact you via letter, email or phone calls. Even if they come to confront you in person at your house, they are only allowed to enter if you allow them. You can also get some debt collection help and advice from an expert to make sure that debt collector is acting within the law.

Calculate How Much You Can Pay

It is a debt collector’s job to get the max amount of money from you in the shortest time frame possible. You cannot just delay the debt forever as you will have to pay at some point. But you can make sure that you do it the right way by calculating your finances and figuring out how you can afford to pay it. Let’s say you have a debt of £4000. You can make a deal with the debt collector by paying 75% of it all at once, forgiving the remaining amount, or you can divide the entire debt into four payments of £1000 Remember you can only extend the debt for a few months not more than that. Promise the method and amount that is feasible for you to pay. Once you have decided on an agreement, it’s hard to go back. So, make sure whatever option you choose is feasible for you.

Get the Decided Payback Plan in Writing

Once you have made an agreement with the collector get it in writing from them to make sure they don’t cause any problems in the future. Don’t just be eager to write the check and get it over with. Get a written signed agreement and keep a copy of it. Also, keep the payment receipts save as proof. And never pay in cash directly if they come to collect at home that could be possibly a scam.

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