Thursday, September 27, 2012

Correspondence With A Debt Collector (Part 2)

This is part 2 of the "Correspondence with a debt collector".  In part 1, our debtor, Joe Smith, is e-mailing A. S., Attoryney, regarding a Megabank debt of $2300 that he was brought to court on, and tried to settle for $1000.  Where we left off in part 1 is the attorney's re-settlement of a litle over $1600 and had until the end of the month (May 2012) to come up with the money.

Tuesday, May 29, 2012

Dear A.,

I am revisiting this and am rejecting the settlement offer of
$1,605.62. Based on our current economic situation I am upping my
original offer slightly to $1,100.00 settlement in full. I am not
filling out any of your paperwork, but I am enclosing an excel
attachment which shows our current debt load and our current monthly

Keep in mind, the monthly budget is an estimate and at any
time my wife's cancer could relapse, which will result in more
medical bills and will throw everything out of whack.

If you'll note on the debt list, I cannot disclose the amount of
medical bills that have added up because it is an ongoing process
for us in negotiating those bills as well.

Please advise your approval of the offer at your earliest convenience.

Joe Smith

(Note: in this e-mail, an excel attachment was sent which showed his current debts
and their monthly budget)

Thursday, 31 May 2012


I can approve your offer so long as payment is made today before 4pm.
You can call me to make payment, or make payment via our website
or by calling our office. Please email me confirmation once payment is made.

Thank you.

A. S., Attorney

Thursday, May 31, 2012


Wow, you gave me 1.5 hours to do this when I specifically told your
firm that I would be sending in a money order after the agreed amount
has been settled on. I appreciate the approval so that we both can get
on with our lives--I'm sure you have other bigger fish to fry. I don't
access this e-mail until at night when I am at home. I could get it ready

tomorrow to mail to you, but since you gave me until 4pm today,
I'll now have to wait until Monday to get it ready to mail.
And I will not do this electronically. That part is non-negioable.

Here is what I need from you. First, that the approval is to settle
this account in full, for the amount of $1,100. Second, I will need
your mailing address to send it to. Once these are fullfilled, the money
order (or actually, a cashier's check) will be sent out. No problems.

Thanks again, and appreciate your prompt response.

Joe Smith

Friday, 1 Jun 2012


It is agreed that if you mail payment in the amount of $1100.00 on
Monday, June 4, 2012, to the address below, upon payment
clearing, our office will issue a satisfaction of judgment to the court
and provide a copy to you. This will be a settlement in full on the
account. Please make payment payable to A.S. ATTORNEY and note your file
number on the payment. Thank you.

A. S., Attorney

Tuesday, September 25, 2012

Correspondence With A Debt Collector (Part 1)

The following is an e-mail trail between a debt collector and a debtor.  As you can see, the debtor got the deal in writing, and was even able to settle on the account--even after being taken to court.  I am not saying everything that was done could have turned out better for the debtor, but given what they had at the moment, this is how it turned out.

The debtor, after going to court, wrote a letter to the creditor asking to settle the $2300 debt for $1000.

Friday, 27 Apr 2012


I am in receipt of your $1,000.00 offer. However, since it is
considerably lower than my settlement authority, I would need you to
complete the attached economic profile so it can be reviewed and
considered. Thanks.

A. S, Attorney

Monday, April 30, 2012

Dear A,

In speaking with my financial counselor, I will not be filling out
any of your attached paperwork. It is completely unnecessary in this
process because you know just as well as I that there is no review
process. In researching debt collection companies such as yours,
and in speaking with former debt collector employees, I know you
purchase these debts for pennies on the dollar. In many cases you settle
for 25% of the total debt. With my $1000 offer, it is around 40% which
is more than generous.

Let's play this game, shall we? What is the lowest offer you are
supposedly "allowed to go"? I'm sure you'd like to get this one
off your plate, so it better not be much higher than my offer.

Joe Smith

Tueday, 1 May 2012


In response to your allegations, our law firm does not buy debt and
did not buy your account. Rather, we are the attorneys for Megabank,
who is the original creditor. Megabank did not sell your account.
Rather, it is merely trying to collect on the debt that you have
failed to pay. I am able to offer settlement in full in the amount of
$1,605.62 so long as it is received by my office no later than noon
on May 31, 2012. I will note your refusal to complete the economic
profile to have your low offer reviewed and considered.

I await your response.

A. S., Attorney

Thursday, September 20, 2012

Can debt collectors "steal" your Social Security?

Let's say you find yourself in the unfortunate position of being in loads of debt and all you have for income is social security.

Then, you get behind on your credit card bills.  So much so that debt collectors start calling your house.  You are unable to pay them, but then they threaten to sue you to take your social security check.  I have one simple piece of advice for those in this situation:

By and large--and you'll have to check with your state's attorney general's office--debt collectors who sue you cannot take your social security check.  Period.  No matter how much they threaten you, they cannot do this.
And if they do threaten you, call the Federal Trade Commission.

Tuesday, September 18, 2012

My personal disclaimer towards paying back debt

Last week I wrote two posts where I talked about the job description of a debt collector as well as not giving debt collectors electronic access to your bank account.

You may ask, "But shouldn't you pay your debts?"

Absolutely.  If you have $10,000 in the bank and you have an old Discover card that you owed $2,500, you should pay it.  But what if you only have $750 to go towards the $2,500 debt?  Then you can do only what you can do.

You should pay your debts, and once you do, strive to never EVER take on any additional debt.  I'm not advocating not ever paying your debts.  I'm just advocating for those who cannot, and are paying off Visa or MasterCard instead of feeding their children or themselves, or even paying your home mortgage.

Thursday, September 13, 2012

NEVER give a debt collector access to your bank account

Never give a debt collector electronic access to your bank account.


Ethically, if you settle with a debt collector and you give them your bank account information, they're only supposed to take what was agreed upon.  Ethically.  But it happens: you settle a $1,000 debt for $250 dollars and you authorize them to take our $250.  The next day, you found out your bank account was wiped out.  You had $1,000 in there but you had other obligations, as well as food, you were going to use with that money.

Never EVER give them access to your bank account.  Once you recieve a settlement in writing--that's the other key, it must be in writing--send them a money order or cashier's check for the amount.  If they tell you that they won't accept it, hang up on them.

Here's the first step though: you need to actually have the money.  To try settle when you don't have the money is foolish.

In the scenario above, one may question why more would be taken.  The answer is simple: debt collectors are salespeople, and it's their job to collect money from you.  That's it.  If it was brought before a judge and you told the judge, "But your honor, they told me they'd take $250 for the $1,000 debt."  The judge would then ask where the agreement is.  You don't have it.  In the judge's mind, it never happened.  You owe the balance of the debt.

The bottom line is this: NEVER, under any circumstances, give a debt collector electronic access to your bank account.


Am I unclear?

Have you had any unfortunate experiences with a debt collector?  Please share your stories in the comments section below, so we can better arm people with the knowledge on how to deal with these people.

Tuesday, September 11, 2012

Job description of a debt collector

Ever wonder what the job description is of those people who call you over the phone, the ones who are trying to collect on an old debt?

I will not divulge the company name, but I believe most are very similar.  Note: the italics below are my notations.  Here it is:

Generate revenue from the collection of delinquent credit card accounts that the company has purchased (See?  They're not calling on behalf of Discover or Chase or Capital One or Citi.  They own this debt.)  This is accomplished through phone calls to the responsible party on the account.  Once contact has been made, the conversation turns to settling and collecting on the account.  Collectors make between 100-150 calls a day to speak with 10-20 clients and (get this) close 1-5 deals.

In the duties section, it states they need to make at least 100 calls a day.  In a typical 8 hour day, this translates into a call every 4-5 minutes.  These people are salespeople, who are paid a commision for each account they settle on.  Yes, they will settle.  If you owe the debt, it will need to be paid.

But, for God's sake, do it on your terms.  Not on yours.

Arm yourself with this information the next time a collector calls you.  This is who you are dealing with.