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It’s not uncommon to avoid calls. You may even begin to screen your calls to know exactly whose calling. It’s something that many debtors do when collection agencies begin to call. Not knowing how you’ll be treated or knowing that you don’t have the money they’re asking for can be scary. Thankfully, there are steps you can take to negotiate with collection agencies. Next time the phone rings, you’ll be prepared to get your finances back on track.
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Face the Music
It can be intimidating to answer the phone when collection agencies call. Not being able to meet their proposed payment can leave you sweating. The truth is though that many collection agencies will work with you. The important thing is to stop avoiding their calls. Avoiding their calls only prolongs the debt and causes more interest to rack up. The sooner you face collection agencies, the sooner you’ll be debt free.
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You may think that collection agencies hear stories all day about how people lost their jobs or have huge medical bills, and you’re right. That doesn’t mean these collection agencies don’t care. If you’re going to negotiate, you need to lay the cards out on the table. Tell them why you fell behind on your bills. Tell them that you want to make things right and are willing to work with them to make that happen.
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Make Payments You Can Afford
Collection agencies may start out by asking you for the full amount owed. Chances are, you don’t have this amount. This may be why you avoided collection agencies to begin with. Later on, you probably received letters offering smaller payments. Unfortunately, these payments are usually still too large. When you negotiate with collection agencies, you need to explain what you can afford to pay each month. Most collection agencies won’t turn down a payment. The important thing to remember is to only pay what you can afford to pay.
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Settle Accounts Whenever Possible
It’s best to settle an account whenever possible. Not only will this reduce the cost of the debt by preventing further interest, but it takes away stress. Paying off the debt gives you more money to pay on other debts and a sense of accomplishment. It’s important to note though that settlements can cause you to owe money to the IRS. The money that you were able to knock off the total will be taxed. This is definitely something to consider if you settle an account and for thousands less than you owe.