Racism 101: Are you a Racist?

Being proactive about cleaning up your debt is always a positive. That doesn’t mean that it isn’t sometimes scary, embarrassing, overwhelming or down right frustrating. Here are some tips for contacting creditors that you owe. Being prepared definitely helps to take some of the fear away. 

Be realistic, not ambitious. Know what you can afford. As always, be honest with yourself. Don’t plan on paying what you might have. Plan on paying what you do have. You know what you can afford right now. Do not plan for “Maybe.” Know your limits and do not negotiate. Stand firm. 

Know When, Where, What and Why. Along with knowing how much you can pay, there are several other questions you should know the answers to before you ever pick up the phone. Will you be paying weekly, bi-weekly or once per month? How will you pay? Credit card, check or cash? How will the payments be made? Over the phone, through the mail, automatic debit or online? Know the dates. If you are paying each week, be clear on the day you will be paying. You get paid on Thursday, you’ll have your payment to them no later than Friday. You are paying monthly? Okay, let them know that you can pay on October 16th, November 13th and December 8th.  

Be persistent but not abusive. Remember that you are talking to a person. Be polite. They don’t have to help you in any way. However, most will want to. Don’t assume that “It’s their job” to help you because frankly, they may very well work for a company that is perfectly happy to file court documents and let this go on forever just so they can continue to add fees. 

Be prepared to Say Good-Bye. Although, most creditors will jump at the chance to get any money from someone who owes them, that doesn’t mean that the person you are talking to on the phone is going to reflect that. If you find yourself in a situation where you say that you can pay X amount of dollars and whoever you are talking to says that they can’t take any less than two times that amount, be prepared to say good-bye. Always remember that because you are talking to a person, they may be dealing with situations that you aren’t aware of. For example, many collection agents work on some sort of commission scale. Which means, some companies pay for any money coming in, while others pay for how much is coming in. Just because you have an overzealous person on the phone, doesn’t mean that you still can’t work this out. If you have to say good-bye, do. Then, call back another time, another day and try again. 

Stick to the plan. This is very important. Let’s say you have figured out that you can pay $100 per month. The person you’re talking to says that they can’t take anything less than $105 per month. That sounds like no big deal, right? Wrong. It’s a very big deal. Five dollars is not in your budget. You know what you can afford. The person on the phone does not. I repeat, the person on the phone does NOT. They are trying to get as much money from you as they can. This is a fairly realistic thing for them to try to do. However, while they are saying things like “Oh what’s an extra $5 dollars,” remember, that $5 dollars is coming out of your pocket, not theirs. Do not, under any circumstance, allow anyone to make you pay more than you’ve already figured out you can afford. Not even if it’s only one dollar.

Keep your word. Another part of the reason that it’s so important to stick to the amount that you can afford is that if you miss a payment,  most creditors will not be so quick to work with you in the future. Let’s say you miss a scheduled payment. The next time you call to try and make some sort of arrangement, you are now being looked at as someone who makes arrangements and doesn’t come through. This is a HUGE problem. You are now seen as a waste of the agent’s time. Why would they want to even talk to you, much less work out a payment schedule? Especially if they get paid on commission. It might sound harsh but remember- You owe them. They don’t owe you.

Have money today. This is not a “Must” but it certainly encourages the situation. If you call a creditor and can put money down today, that is a great sign of faith. Here’s the best part, you don’t have to make a full payment! If you can, that would be great but if you can’t, anything you can put down will be looked at as good intent. If you can pay $100 monthly but can only afford $20 today, pay $20 today. 

*Please note: This is for bills that have gone to collections or credit cards that have been cancelled while still having a balance owed. This is NOT how you would handle a current bill.