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How to Effectively Negotiate With Bill Collectors

written by: MsConnie•edited by: Donna Cosmato•updated: 5/9/2011

The key to effectively dealing with bill collectors is to educate yourself on your rights as a debtor and to know what bill collectors legally can and cannot do.

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    Knowledge Is Power

    184145vyjhc0neu Learning how to negotiate with bill collectors is not as hard as you might think. That first call from a bill collector can be very intimidating to a person who paid their bills on time until an unforeseen financial crisis hit them. For the most part, bill collectors are professional, but there are many bill collectors who aren't. Familiarizing yourself with debt collection laws will enable you to be in control the next time a bill collector calls, rather than you being controlled by the bill collector.

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    Become an Informed Debtor

    Read up on the Fair Debt Collection Practices Act (FDCPA). The act prohibits bill collectors from using deceptive, unfair or abusive tactics to collect money from you. A bill collector may not threaten to sue you or pose as an attorney, law enforcement, or government official in order to collect money from you. He may not threaten to discuss your debt with others, provide false information to the credit reporting agencies, or use obscenities or profanities while discussing your debt. If you end up dealing with an unprofessional bill collector, you have the right to end the call. The bill collector cannot call you back for seven days.

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    Keep Your Cool

    Refrain from getting defensive or belligerent when a bill collector calls, even if he or she becomes verbally abusive. Calmly state that you are willing to work out a payment arrangement, but you are also well aware of your rights and do not have to tolerate unprofessional conduct. If the bill collector persists in being verbally abusive, politely hang up.

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    Ask for Proof

    Do not agree to pay anything until the bill collector confirms the debt is actually yours. Bill collectors are required by law to send you a dunning letter that provides information about the debt. The letter should include the bill collector's name, mailing address and contact number, as well as the name of the original creditor and the amount owed. The letter should also include a disclaimer that states that the communication is an attempt to collect a debt and any information obtained will be used solely for that purpose. By law, you have 30 days from the date of the letter to dispute the debt.

    If you received no dunning letter prior to bill collector's initial phone contact with you, you have the right to request one. Requesting a dunning letter is also known as requesting debt validation. If the bill collector refuses to validate the debt, by law you are not required to agree to pay it, and you can hold the bill collector liable if he reports the invalidated debt to a credit reporting agency.

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    Pay Only What You Can

    Don't let a bill collector intimidate you into paying more than can afford. Likewise, don't agree to payment arrangements you cannot keep. Be honest and explain your situation, even if it means stating that you cannot pay the debt at this time. A bill collector cannot force you to pay money you don't have, and an ethical one will be willing to work out a payment plan within your budget even if it is less than what he hoped to collect. Inquire about a possible settlement. A settlement is a lump-sum payment equaling half the amount of the original debt. Some collectors will allow you to pay the settlement in two or three installments depending on the amount. Once you pay the settlement, the bill collector marks the account paid in full. Request written confirmation of your debt's paid-in-full status and be persistent about getting it.

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    Knowing your rights as a debtor takes a lot of the stress--and fear--out of knowing how to negotiate with a bill collector. Unfortunately, there are a lot of bad apples in the debt collection industry but even the bad ones have to adhere to the FDCPA. Once they are aware that you are armed with knowledge, it takes a lot of the sting out of their bite.

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    Image Credits:

    Man on telephone via

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