Debt collection negotiation script
So I made this script for my wife. She has to call and handle some debt collection from credit cards we stupidly incurred in our early 20’s then defaulted on.
These are tactics that were modified from a decade of working in dealerships and watching successful car salesmen use them on customers for years.
Have a price and stick to it!!!
They say: “We’ll settle this debt for $XXX” You say: “I can’t afford that right now. How about $XX?”
They say: “Well we can offer payment plans! How does $XX a month sound?” You say: “I can barely pay my bills with the money I make now. I just received a little bit of extra money that I’m trying to pay bills with. This has to be in one payment.”
Don’t tell them anything about why you’re paying debt off!!!
They say: “Why are you trying to settle the debt? Are you trying to get a new car or a house?” You say: “No. I’m simply interested in settling this debt.”
Don’t be afraid to hang up!!!
They say: “We can’t go any lower than this amount right now” You say: “Well, unfortunately I have some other debts. I can’t afford your offer right now, so I’m going to contact them and see if they can settle for what I have.”
They’ll come up with something to try to keep you on the line. You have to stand firm that you simply can’t afford their lowest offer at this time and you’re going to search elsewhere.
Silence is your friend
If you hit a lull in the negotiation (no matter what side), DO NOT BREAK THE SILENCE. When this happens after an offer on either side, the first to break loses. Let them sit in the awkwardness of the silence. If it was their offer, they’ll ask if you heard them. Respond yes. Then let the silence settle again. When they break it a second time, let them know that you can’t make that payment and this may be an opportune time to say that you don’t know if you can pay anything on this at this time and you’re going to call some other debtors.
All personal info hurts you/helps them
Do not reveal anything personal. There is no situation where you will be able to use guilt, shame, or empathy on them. They don’t care. They hear it every phone call. Nothing about your personal situation will help them, but talking about your kids and lack of (enter necessary item that requires good credit) will give them ammunition to drive their final price up. You look desperate. They have to be afraid that if they don’t settle today, you won’t ever pay them and you’ll still be fine. THIS IS NOT AN EMOTIONAL ISSUE. Emotions will be exploited.
By all means, feel free to add to this in any way. I’ll add/edit what I have in the original post with other good tips. Hopefully they can help people in similar situations.
Edits: Dealing with debt by phone call isn’t always necessary. As pointed out below by /u/thewitchof-el, you can contact them by mail and not have to deal with some of the hassle of trying to haggle. You’ll have to make your own decision on how pressing it is and whether or not you could wait a couple or several weeks to settle your debt.
A few more things:
A debt settlement is different from paying a debt. Look up how a “debt settlement” affects your credit in your state.
Keep a log of your phone calls and always ask for a reference number. It makes it easy to continue the conversation if it requires multiple back and forth calls.
ALWAYS get a copy of the settlement agreement in writing, before paying.
Try to settle with the fees included. Many collectors will charge a processing fee for paying via phone or wire.
Don’t be an asshole. The other person is just doing their job. Keep calm and it’ll make the entire process less stressful.
See /u/Shadeauxmarie comment for information about tax implications for forgiven debt. If you’re forgiven for over $600, you’re required to claim that money as income when you file your taxes.