Negotiating with debt collectors Pt II

Contrary to popular belief, debt collectors can be negotiated with; however, being knowledgeable about your rights is essential to securing a good deal. I would not advise going up against a seasoned professional debt collector without being properly prepared. The first thing that you need is a clear and concise plan: Before you start educating yourself about your rights you should put in writing what it is that you want to accomplish. Don't let this process overwhelm you; it need not be a complicated. You can start simply state:

1. Learn Federal and State laws concerning debt collections.

2. See how they apply to my situation.

To have any control over your financial future, then you absolutely must make being in control of how much information you allow a debt collector to have to be your number one priority. You do yourself severe damage when you try to explain why you can not pay a bill. They do not care about that; and, it only gives them control that you really do not want them to have. Do NOT tell debt collectors what you do for work or where you work. They will only use this information against you. I do not care how nice or important they sound or appear to be. I understand what it is like when you speak to someone who you consciously or unconsciously think of as a figure of authority. Some people get nervous and start babbling about everything; but, what you need to keep in mind is debt collectors do not have control over your life and finances. YOU are in control and until you see that you will continue to be victimised by any and every bully that comes along. You are the authority figure in your life. Your finances are in your control and under your command. The only person that can straighten out your financial situation is YOU.

The next thing that you should do is Prioritise your bills. The most important bills are your monthly bills like: rent,mortgage, telephone, food, fuel and car payment etc.... Ignore threats, pleas to the contrary by debt collectors. Do not allow yourself to be pressured into making pay arrangements that you can not afford.

When you make a verbal agreement concerning a pay off or payment plan with a debt collector, make absolutely certain that you don't give them a penny until you have the agreed upon terms in writing. Here are some informative links to get you started.

Negotiating with debt collectors: The Shame part I

The secret to successful negotiation with debt collector is: being knowledgeable about your rights;exercising the wisdom when using them and, being confident in what you know to be right for you and your family. Many debt collecting agencies teach their employees not to negotiate with debtors; which, in my humble opinion, is stupid. Many collection agencies,hinder themselves by not properly educating their staff about the importance of remembering that, their debtors are also human beings with other responsibilities.

If I were addressing a debt collector directly I would advise him/her to become a solution rather than a problem identifier. Most people can identify a problem, but how many actually do anything to solve peoples problems? I have found that if I helped them to solve their problems then my problem was taken care of by default.

In order to utilise your assets, you must first know what they are. Each state has laws regarding debt collection. So find out what they are, for example; in some states your wages can not be garnished; however, it does not hinder a collector from threatening you with that, though they are not legally supposed to. If you know your rights you can inform them that what they are doing is not legal. You can start by going to http://www.bcsalliance.com/y_fairdebtcollectionact.html to check out the what the Fair Debt Collections Practice Act means and how to make it work for you.

Listen, I know that many times that collectors have been successful at making you feel like they are in charge, believe me I know because I have done it myself; however, it is essential that you realise that it is YOU who are in charge. They can not get a dime of your money unless you give it to them.

There are so much shame that surrounds owing a debt; there is no need for that shame and I will tell you why. Many of the very people calling you are in debt themselves. The very people that they sold your account to are also in the same kind of debt and worse. They would have you believe that you are some type of pariah based on your problems with money, when they have problems that are often just as bad if not worse. When I was in business, the people that I had the most difficult time collecting money from were the wealthy people who, for all intents and purposes, should have been able to pay their bills.... So very many of them were late and if I would have turned them over to an agency to collect then you lost their account; which, I needed to stay in business at the time so, I had to grin and bear it.

One of the problems with the financial system is that even the so called experts are poor money managers. It seems the more money that they get, the more that they need and it trickles down to a point but, there seems to be a blockage or a leak in the financial system pipes and funding is not going where it ought to. The difference between many of them and you is that the executives get paid kick backs and bonuses that you will never get.

People with a lot more cash are given a flexibility with their debt that your average working Joe or Jane are not afforded. The point of this lesson is for you not to allow others to make you feel as though you are somehow less because you do not have their good fortune. I want you to understand that though, this kind of injustice exist, you have rights at your disposal.

Paying bills on time makes life a little easier.

One of the biggest mistakes that I have ever made was not paying my bills as soon as they came. Often, I had the money to pay them but, the dead

line would be from one week to one month away and I would think, "Hey! I've got some time to play with, I'll go shopping instead; after all, I get another paycheck between now and then." Then when the deadline came I either forgot about it all together until I got a late notice, or sometime unexpected would happen and I would be unable to make the payment. Once you set a pattern of making payments in this fashion things get so far out of control it is not only hard to catch up. The bills pile up fast and they seem to take you over like an avalanche.

It seems that I am going on and on about budgets in every blog entry that I make: I will continue to do so because it is the very back bone of not only getting out of debt, but living a more worry free life. There are different types of debt but I want to focus on the small debts because, most of the time that is what does the most harm to your credit and peace of mind. In my opinion, small debt any bill {that is not monthly} $1,00, to $5,000 and you can get it paid off quicker by:

A. Making a timely payments.

B. Making bulk payments.

C. Paying them in full when possible.

The debts that I am referring to are things like credit cards, cell phone, furniture company, fuel or anything of that nature. It is not wise to ignore it but handle it head on. If you are not behind but, headed in this direction stop and start making timely payments so that you are not behind. If you are already in this situation it is not to late to make the necessary changes; I know that you will be glad that you did.

Fair Debt Collection Practices Act (FDCPA)

Did you know that debt collector's are not supposed to call before 8AM or later than 9PM? FDCPA: The Fair Debt Collections Practices Act is a federal law that dictates how a collection agency can collect on debts owed. If they violate this law then you can sue them; however, it does not stop many collector's that are ignorant about these laws. When I worked in debt collections, the companies that I worked for wanted their employee's to be as ignorant about these laws as possible; which, was not a smart move as they eventually got sued.

Debt collector's are not allowed to:

I. To threaten or harass you: There have been people traumatised by debt collectors threatening them with bodily harm, harm to family and jail when a debt in order to collect a debt. This is not only illegal but a criminal act that could result in jail time for anyone found guilty of doing this.

II.Imply that the law has been broken: Some debt collector's have even resulted to implying that, debtor's were breaking the law in order to collect on a debt. They are in violation of the law if they do this and could be held accountable in a court of law.

III. Must honor written request to stop all contact: There are cases where collector's are trying to collect on a debt that may not belong to you. {I can not stress enough that if you owe the debt make a payment plan and STICK to it.} If you do not owe the debt and, you request in writing that this collection agency stop all contact with you; they are in violation of the FDCPA if they do not comply.

IV. They must identify themselves when calling to collect on a debt: For example; they are not allowed to say that they are the police or with a government agency when they really aren't, just to collect a debt from you. Though many collector's are allowed to use an alias when they are contacting you about a debt; they are by law required to tell you the company that they work for and, the reason for the call.

Doing some research at a local level with teach you a lot about the laws concerning your rights and debt collection.

Should I let bailiffs into my home?

As I said in the previous blog, the ONLY bailiffs that have the right to come into your home and confiscate your belongings are from the Inland Revenue and, these days it is rare that they do that. Listen, I understand that there are things that we do not have control over and unexpected things in life occur. Work out a payment plan with your creditors and stick to it: you will avoid all of this bailiff headache. When you get the extra money make extra payments if necessary so that you can get your debt paid faster or at least not fall in arrears.

If you are timid and do not understand your rights they will bully themselves into your home and they will take your items to put up for auction to clear the debt that you owe. They do not just take what they know will cover the debt; but, also take much more so what ever you do DO NOT LET THEM IN!

When you let them in them you lose control. Your home is still your territory not theirs, though they will try to make you feel like it is. The reason so many bailiffs get away with so much is the ignorance on the part of the debtor. I am not giving you this information to avoid debt payments; contrarily, I am just informing you about your rights.

They will attempt to intimidate you into signing what is called "walking possession agreement", but remember in order for this to be valid it must be a legal entry. If you know that these people broke into your home to collect do not sign anything. Make sure that you contact that someone that you know that you can trust to support you as well as the police if need be. More than likely, if they are smart they will take a hike. There is so much information to give about this topic that I will have to make it an ongoing series.

What you should know about Bailiffs for our UK friends!

I have never personally had to deal with a bailiff before but have known some people who have; and, from what they told me it is not an experience that I relish having. I wish that I could say that I understood that many of them were just honest people doing their job but it is just to hard for me to say so because of the attitudes they-come-a-knockin with. Did you know that there were different types of bailiffs? Well there are and I think it is a great idea to arm yourself with information about your rights when dealing with them.

My blog is read by people by people in several countries so, I thought that I would talk about some of the rights that our friends in the UK have in regards to bailiffs. Did you know that anyone can be a bailiff? Well the definition in this instance is one who collects debt on behalf of a creditor. Though, there are different bailiffs for collecting different types of debt it is important to understand that there are rules that all bailiffs; whether, they be certified, county court or private absolutely must adhere to.

Firstly, a bailiff has to be legally authorised to do his job and you have the right to ask if he/she is. Make sure that they properly identify themselves: Take his/her information and, if you do not trust him/her then call the number that you should see on the identification or warrant. If he is from the county court he will have a legal warrant of execution. Magistrate bailiffs will have a distress or liability warrant to collect if you are behind on things like council tax, overdue fines or unpaid maintenance fees. Then there are the private bailiffs which are no more than just debt collectors plain and simple.

In a perfect world bailiffs would call at decent hours but, this is not a perfect world and there are many occasions that they will call at anytime during the day or the night. Reasonable hours are between 8AM to 8PM anytime after that is really unreasonable.

Though it is rare, it is important that you know that, the only bailiffs that can confiscate your property are the ones from Inland Revenue and, they must have a warrant to do so. No other bailiff has the right to break into your home though I have heard of more than a few cases where this has happened. If you are not cautious and you leave windows and doors open they can and do climb in. They will use a number of slick tactics to get into your home including intimidation but do not allow it. If they come with a police officers they are ONLY supposed to be doing so to keep the peace but that also has been a joke!

HIPAA Laws

There is so much information concerning HIPAA ; I would have to conduct a whole series on the subject so, I will stick to the basics of what it is and how it effects you in respect to debt collection. In 1996 President Clinton signed the Health Insurance Portability and Accountability Act. HIPAA or the Privacy Rule is designed to protect your information from being distributed to anyone with the exception of patient care or other mitigating factors. I am afraid debt collection does not rank high on those list of reasons; therefore, there are a list of entities that are bound by these privacy laws and they are: Health plan insurance companies, health clearing houses, Debt collection agencies; often referred to as billing agencies or repricing companies. Md's, Clinics, pharmacies, Psychologist, Nursing homes are included if they transmit information electronically. They can do this by fax but not by Internet.

I am not telling you that the listed entities are not allowed to turn your information over to a debt collection agency because that is simply not the truth. Do not believe for a moment that medical debt is something that can not affect your credit because that also is a myth; It can and does affect your rating. What I am trying to say is that debt collectors have a strict set of rules that they must adhere to in regard to how they got your information concerning your debt. For example; I worked at places that encouraged you to disclose how you came by the information, protected by HIPAA, to collect on debts when were legally not allowed to. If they are found out not only could the debt collection agency be sued but so could the agent or agences that worked on the case.

Learn about these laws even if they seem to bore you to tears. Call HHS and get someone to explain the laws and how the protect you. Arming yourself with the right information will save you a lot of frustration.

The best thing that you could do to avoid debt collection agencies from getting your information is to work out a payment plan with the medical entity that you owe and stick with it. Don't make excuses, they are businesses that have employees and overhead to pay and keep that in mind. I will probably push making a good budget in every post that I make because it is essential to getting out of debt. Many of the bills are not as difficult to get paid off as you may think.