How Should You Negotiate A Settlement For Debt Collection

When a person is in the process of reaching an agreement to resolve debt problems, there is always a chance of getting a negative impression in his future credit report. But on the other hand, this deal may also work to his advantage by clearly showing that he is taking the responsibility to pay for his debt. Thus, in his future credit report, it will be indicated that the amount of debt that has been settled is no longer outstanding. So how does one negotiate a settlement for debt collection?

These are some of the most effective ways to negotiate for a debt settlement:

• Calculate the capacity to pay. A person under a settlement agreement should never suggest an amount that he can’t afford. Once the budget has been reviewed, he may start to negotiate through offering much less. In addition, references, account numbers of bank savings or even the place of work must not be disclosed to a debt collector when negotiating.
• Notify the creditor who referred the debt if the collector declines any settlement. See if he is willing to discuss any terms that will help in reaching an agreement.
• It would be wise to request the debt collector to take away any negative information from the credit records that are related and have been added to the records from the time the debt collection was given to him. When done, the credit histories should not have any negative information.
• The deal must be put into writing. Before giving out payment, make sure that the important aspects of the deal have been written. A consumer lawyer may be hired to study the written agreement which should indicate the following:
  • The amount to be paid;
  • Method of payment, whether in lump sum or extended time;
  • Mode of payment(s) like cashier’s check or through electronic bank transfer. Do not give personal check;
  • The due date for payment;
  • Exceptions that were granted by the collector;
  • Agreement to notify the credit agency of the full payment once the amount has been received;
  • Circumstances that infringe the agreement as well as the repercussions.
• Never sign an agreement that does not include everything that was agreed upon and until all details have been taken in. When a debt collector refuses to write the things agreed to, the payer can make the written agreement with his signature and then send this to the collector through certified mail, with a request for return receipt.

There is always an option of hiring the service of a consumer lawyer to do all the negotiating with a debt collection agency Toronto, especially if a considerable amount of debt is involved. This may impel the debt collector to just settle the debt for less.

In the long run, the amount that is not paid will be disclosed to the IRS as earnings, which means the debt settlement will oblige the debtor to pay more in income tax.

What Debtors Need To Know About Debt Collectors & Debt Settlement?

The failure to pay a debt collection agency in Toronto like that of CTL Law can compel the debt collector or a creditor to file a suit in order to collect money. If this happens, make sure to reply either personally or through a legal counsel on a specified date stated in the lawsuit. This quick and appropriate response will protect your rights in the filed case. In the event of a loss, a decision will be filed at the court that will allow the creditors to bring up the collection to a higher level. A debtor’s salary may be trimmed or he could ask the bank to withdraw from the account to pay the due amount.

What could happen if the law is violated by the debt collector?

Any violation of the Fair Debt Collection Practices Act by the debt collector must be reported to the office of the attorney general and to federal trade commission. In addition, the collector may be sued within the year that the violation was made. If the case is won, the collectors are accountable for damages like the lost of wages. Reimbursement for the attorney’s fees as well as court costs may also be demanded. But this violation, regardless if the debtor wins, will not cancel the debt.

What can debt collectors do?

They are prohibited from telling lies, harassing and from doing the following:

• Repeated calling;
• Making known to the public about the debt except to an agency that reports credits;
• Falsifying company’s name, the identity or the amount of debt;
• Hostility or using inappropriate language;
• Forwarding anything that appears to look like an official document from the government;
• Saying that a legal action will be filed when in fact there are no plans to pursue a case;
• Sending notice of collection through postcards;
• Early deposit of post-dated checks.

How should debtors deal with collectors?

When dealing with debt collectors, it is wise to have a record of all phone conversations. Make sure to indicate the name of the collector, the time and date of the conversation, the name of the company he represents and every detail of what have been talked about. The letters from the debt collector as well as the messages retrieved from voicemail should be saved. Any agreement must be in writing, especially if the payment terms of the amount of debt are concerned. Instead of using personal check that may show bank information, a cashier’s check is recommended. Beware of scams that are debt-related. Any offer by a company telling that they can help in settling the debts should be dealt with caution.

To avoid problems, it is best not to delay the payment of all bills. But if this becomes unavoidable, inform the creditors immediately about the situation. The honesty and the initiative to admit that despite the financial constraint, there is still plan and willingness to pay the debt may likely bring a favorable resolution to end the problem of paying the debt.