To Be Bullied Or Not Be Bullied, That Is The Question

I think that dealing with creditors is probably one of the most emotional experiences one can have at a time when they are likely the most vulnerable.  Think about it.  When you owe someone money and they are constantly hounding you to pay what you already know you owe, it can break anyone down who does not know how to handle them.  Usually what happens is they use tactics to bully you into using your grocery money to pay them NOW!  Credit Sharks In Suits (FPU Lesson) is great for helping you learn how to deal with these sharks, as well as learn how to avoid them all together.

Myth:  You need to take out a loan or open a credit card to build your credit score.

The truth as Dave Ramsey explains it, is that a FICO score is no more than an “I LOVE DEBT SCORE”.  You have to continue to go into debt and pay it off in order to maintain a good score.  Everything used to determine your score is based on debt.  Old debt, new debt, level of debt, length of debt history, and debt payment history.  Someone has started a myth that says you HAVE to borrow money in order to establish yourself in the world.  Your financial responsibility is based on how irresponsible you are with money.  What is wrong with this picture?  Now some would argue that you can have debt and still be financially responsible, but I disagree.  When you borrow money to buy something that you do not have the cash to buy, common sense says that you can’t afford it.  Is it responsible to borrow money that you don’t have to buy something you can’t afford in order to build something that you don’t need?  Your FICO score is a tool for the banks to win NOT YOU!  Some often cry that they need a credit score to get a mortgage one day.  This is also a myth.  By going to a Mortgage Lender that does manual underwriting, you too can get a mortgage without going into debt to earn the privilege.  Save a down payment, be early or on time with your rent payments for 2-3 years, maintain the same job for the same amount of years, and of course make enough to be able to afford that house.  Don’t buy into the myths anymore!

How do you deal with bullies that use fear tactics and guilt to collect?

The basics to dealing with collectors are as follows:

  1. Your income should FIRST cover your FOUR WALLS. (Food, Utilities, Shelter, Basic Transportation)
  2. If you don’t have the money to pay them DON’T pay them. Don’t let them use fear tactics to make you pay them money you don’t have.  Prioritize your necessities and when your income runs out that’s it.
  3. Make the creditors treat you with respect when they call and only allow them to call you every two weeks.  If they try to bully you or make you feel guilty tell them you will talk to them in two weeks but only if they behave.  Deal with them on your terms, but be sure that you are fair at the same time.  After all you do owe them money?
  4. Do a budget and consider using the Pro-Rata method to give yourself some time and traction to get out of your mess.  This method will in some cases keep you from being sued, as well as buy you six months to a year to gain control.  Do not be confused, they can still sue you, but if you are trying to do everything you can to pay them the money you owe them they may not be as likely to waste their time taking you to court.  (I will post an example of the Pro-Rata method on my home page in the sidebar.)
  5. NEVER, EVER give your creditors electronic access to your bank information.  They will lie to you about how much they will take.  Get any deal you make in writing before you send them payment.  Mail your payment certified so they can’t say they never received your payment.
  6. In EXTREME situations where you are threatened or worse you can write a Cease and Desist Letter to keep from contacting you.  You only want to do this in EXTREME situations because when you cut off the communication good or bad, they will surely sue you in court.

The bottom line is that no matter what situation you find yourself in there is a likely solution to YOU turning things around.  It is going to take some patience and hard work, but YOU can do it!  Once YOU start to get some traction with YOUR money YOU can accomplish so much.  Most people make the mistake of buying into the lies that creditors use in order to get them to pay.  When YOU are in control YOU will make better decisions, and the light at the end of the tunnel will begin to emerge.

Good luck and make the decision today to not be bullied ANYMORE!

Do you have a story you would like to share about an experience you had dealing with collectors?  Tell us about it.

EDITED:  Changed Title ending, but forgot to change the beginning too.  BC @ EOD

About Brad Chaffee

4 Responses to “To Be Bullied Or Not Be Bullied, That Is The Question”

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  1. Peggy E. says:

    My story on dealing with bullies and winning. I switched my cell phone and paid AT&T in full. However, somehow they showed a balance of $117 that they sold to a variety of collectors. Each time I would get a notice, I would send a debt validation letter asking them to prove the debt to me. Invariably I would never hear from them again.

    I had the same thing happen with Palisades Collection. I sent them a DV letter and then didn’t hear from them for 18 months. Then I see the item appear on my credit report. A week or so later I receive the “validation” by mail, forward to me because the collection agency had sent it to my old address. The “validation” was an old ATT bill that didn’t even show the amount they were trying to collect. In addition to the fact that they didn’t actually “validate” the amount, they re-aged the item on the credit report to make it look newer than the actual date of closing of the AT&T account.

    I sent them a letter back again disputing the amount and informing them that if they didn’t remove the collection item from my credit report, I would file complaints with the FTC and the Colorado Attorney General. After 30 days and no response, I did exactly that.

    I forwarded a complete package of correspondence to both the FTC and the AG. I never heard anything back from the FTC, but got a phone call from the AG’s office. I gave all my information to a very nice lady there who promised me they would be pursuing the case. In fact about three weeks later she called me back and told me that Palisades had decided to write off the amount and not pursue it out of “goodwill” because basically they knew they were going to get creamed by the local AG. They had been spanked and they knew it and were running away, tail tucked between their legs. We both laughed about it. That’s the last I have heard about this debt. This time I think it is well and truly dead, because if they try to sell it again, they will be in violation of the law and they could really get their butts handed to them by knowingly selling a debt that they know is not valid.

    The moral of the story: know your rights, know how to pursue it if your rights are violated, and be willing to fight back. I knew that what they sent me didn’t constitute legal validation of the debt and that it was a smokescreen designed to get me to roll over. Bad move. It just made me mad. It’s not a good idea to make me mad………

  2. Brad Chaffee says:

    Thank you Peggy for sharing that story. The only trouble we have had so far is simply trying to close credit cards. It takes an act of Congress for Credit Card companies to actually do what you ask them to do. Close my credit cards NOW! LOL Most of them were like, “Well most people keep one open in case of an EMERGENCY!” We just said well MOST people are broke too, and we have an EMERGENCY FUND now! Take that! 🙂

  3. ka says:

    Yea, but how do you get around this with student loans? You can’t….

    • Brad Chaffee says:

      Generally people who collect for student loans do not use bullying tactics. The core of this post is to get people to think twice about allowing outside creditors bully them into giving them money they cannot afford to give them. I have not heard of many stories where Sallie Mae threatened or called the person who received the loan names and such. There’s a big difference. Plus there is such thing as deferment when extra time is needed, something that credit card lenders do not allow.

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