Tuesday, October 18, 2011

Communicating With Creditors

And there was music and there were beautiful roses...

Today is just like any other day in this beautiful world. And it's beautiful because communicating with your creditors will be easy. It will flow and you will get to be the CEO of You, Inc. acting on your behalf and that of your family...even if it's only a dog or two.

Imagine that you are looking for a job. You have spent hours in your search, typing up resumes and sending them out and nothing comes in. Then you see a job for a credit counselor in the collections department of a large corporation. You apply, go for the interview and voila, they hire you. You aren't sure this is the right fit, but hey, it'll mean a paycheck....if only you didn't have to deal with all those deadbeats!!

The folks we are talking about answering the phone are us. They have mouths to feed, bills to pay and need the work. Just like you. Just like me. So remember this when you clutch your chest and take a dive into the deep end of the pool. These aren't boogeymen answering the phones. They don't have horns on their heads and they don't have sharp pointy teeth. All they're doing is reading a script.

But so will you.

The best thing I can tell you in communicating is that the people you speak to are not the enemy. Neither are you. Be polite and explain your situation. But use good judgement when describing what has happened. You don't need to tell them anything personal unless you feel it's necessary. But above all else do not promise anything on the first phone call. In fact, never promise a thing.

Here is a script I always used in dealing with the creditor:

You: Hi, my name is _____ and I'm calling about my account. The number of the account is _______. I want to say up front that I acknowledge my indebtedness to ABC Corporation and at this time my financial status is unclear. I want to let you know that I plan on paying off the debt. I would like you to close the account as I will no longer be using the card. But I would also like to ask for a moratorium for (one month, three months or six months) as I am in an unstable situation...(again you can choose to disclose the situation or not - mine was due to Hurricane Katrina and Wilma). I am seeking counsel on what course to take and how much I will be able to pay in the interim, while I get my life back together. I appreciate your patience and I will be in touch with you in one week to advise you of my plans.

Creditor: "Oh no, Sir we can't possibly give you a moratorium at this time. We understand everyone has bumps in the road, but we can't possibly let you pay whatever you feel like paying. And if we don't have a check from you in the amount of ___ by next Tuesday, we'll be forced to take action."

Okay, so maybe their teeth are a little pointy.

You: I understand and want you to know I plan on paying off the debt but the most important thing right now is making the mortgage payment/or rent, paying the utilities, buying food and gas and paying for car insurance. Please understand that I want exactly the same thing your company wants - the debt to be paid off. So we're on the same page. In the meantime, please bear with me until I can get back in touch with you. If I don't have a roof over my head and pay my utilities and buy food, I will not be able to pay off the debt. I am good for the debt. But I need to find a job (or whatever need you have to take care of) first and will be calling you back within the week.

For now it doesn't matter what they say, because you'll just go back to your script and re-read it like the happy little parrot you are. Even if that feels uncomfortable...you're driving it home and being a force of nature!!
That you're taking the reins, is a huge step. You are in control, calm and assertive...like the debt whisperer.

They may ask you to take money from your 401K or borrow money from somewhere else. (But you don't take out unsecured debt, remember?) So you simply say a firm no. They can threaten you all they want, but my experience has been they don't want to send you to outside collections, because they'll make pennies on the dollar. They may talk crazy like the one creditor I had who asked me to get money from my Mother. I told them she was in a nursing home, had dementia and had no money - all true. Then I said, POLITELY, I am going to end this conversation. Five years later, I was able to finish paying off the debt.

Just remember that these people need to put food on their table, dress their kids for school and are not the enemy. You are also doing a job, a rather large job of getting out of debt. And the best news? YOU WILL!!

It's important that you write down the date, time and name of the person you spoke to, the conversation highlights, the tone of the conversation and the outcome; this may help you if you ever go to court. You probably won't need to, but it's a good idea to keep good records. You can if you want, write a letter to them confirming any agreement you've made and file this away. Eventually you will have a stack of these alongside your statements that are in a file named ON THE BACK BURNER.

And now for more good news. Go and enjoy your week. This is going to be a smooth flight, not a bumpy one. Enjoy yourself and don't think about the debt.

"I LOVE money." (what the Financial Genie told the drive thru teller when she grabbed the cash out of the drawer)

"If there is no enemy within, there can be no enemy without." Anonymous

Cautionary Note: I am not a Financial Planner, Financial Advisor or Certified Public Accountant. I am The Financial Genie sharing my experiences with the readers who, like me, have been faced with shame, disgrace and multiple threats from creditors and decided to turn my life around. I take no responsibility for those who fall on hard times. I do not advise. I make suggestions that worked for me and many others.

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