Can I talk to the collection agencies to pay off my debts? Please help!?

Question

I have $17,000 in credit card debt, including one loan. All of my credit cards have been charged off and I have to call to speak to the collection agencies. Will they work with me if I call them so that I can work out a way to pay it all back? I don't want to file Chapter 7 if I don't have to. If my accounts are all charged off, will this look bad on my future credit if I try to work with them to pay them back? Please help! I don't know if I should be scared to call these collection agencies or not. Please advise!

Answer 1

I reeally cannot tell you if you should be afraid of calling collection agencies. My direct experience is that a collection agency has all the charm and character of traditional boiler room operations with large open rooms filled with divider created cubicles manned by chroncally underpaid, limitedly education, verbally expressive employees most of whom were in running for "Most Obnoxious" in high school. They are largely business failures barely surviving and use the position while in a holding pattern in this period of their lives. They are capable of reading prepared scripts and have little authority or autonomy in carrying out their duties. Managers are those who have done this work for a number of years and have avoided burnout by luck or nature.

Businesses are owned by individuals who are competent in collections law and often are law school graduates or nearly equivalent. They are used to dealing with a majority individuals who are, to one degree or another,  stupid, dishonest, untrustworthy and manipulative. They fail to distinguish, if they are even capable/caring of distinguising between individuals who have been set back by illness, misfortune, intentional actions by those once trusted or actions overwhich they had no ability to foresee or control. You appear in this second group for all it matters to collection agencies.    

       Collection agencies will work matters out with you if:

      1) The clients for whom they work are agreeable; and

      2) They see no better alternative.

      You can reduce both the amount of principal and interest in an agreement that is in writing signed by the collection agency. BUT YOU BETTER MAKE SURE YOU ARE CAPABLE OF CARRYING OUT THIS AGREEMENT BECAUSE IF YOU VIOLATE IT ONCE YOU MIGHT NOT GET A SECOND CHANCE.

       My preferred solution is to make a list of creditors and the amounts of debt. When I have saved 25% to 50% of a debt, I call and offer 25% of the debt as payment in full. Upon rejection I tell them I am calling the next name on my list and enjoy the wait.

Almost all are accepting 50% payments. Yes it shows up as less than admirable on your credit record but it is better than a full charge-off.

      If you have steady employment income, consider filing a Chapter 13 Reorganization. This is a Court monitored and supervised repayment plan of between

20% and 50% of your debt. The amount repaid depends upon the skill and abilities of whoever writes your plan.

        Chapter 7 is a liquidation. You get to file only every seven years. It used to wipe out all debts but our Congress who pander to Banks, S & L's, Freddie Mac and Fannie Mae have changed the rules so you still owe 10% to 15% of your debt post Chapter 7.

           Due to your limited CH-7 filing rights and present consequences, this would be an option only if your debts exceed three years income.

           Keep in mind that doing nothing is an option. Our country has no debtor prisons... The only thing creditors can do is charge you more money. If you cannot pay back $1, why worry about oweing them $1.25.

           Keep up with your efforts to address your debts. Worry about tomorrows rent and next weeks groceries. It will work out over time.

          Good Luck.

Answer 2

Most definitely DO call them!  They will work with you to get your debt paid off.

You should have talked with the original debtors because they would have helped you figure out a payment plan also.  

Never wait. Call and they will work with you.