News & Events

Facing Debt Collectors: An Empowering Experience

08/20/14 at 03:43 AM by Jillian Hanes

Imagine sitting down to a nice dinner after a stressful day on the job, and the phone rings.  Against your better judgment, since you don’t recognize the number, you answer the call. 

Collector: Mary?

You: Yes.

Collector: This is Ms. Smith.  I am a debt collector with ABC Collection Agency and this is an attempt to collect a debt.  We have a claim in our office from ZYX Credit Company in the amount of $2,654.56. This amount is 192 days overdue.  What date this month can we expect this payment from you?

You: I can’t pay it this month.  I have a lot of other bills right now.

Collector: Ma'am, if you don’t pay it this month, we will have no choice but to post you on a public list of delinquent debtors.  And we will call you every week until you make the payment.

If you have ever received one of these calls, you know how helpless it can make you feel, and you are certainly not alone.

Over 35% of American adults with credit records have debt with collection agencies, according to a study conducted by the Urban Institute.  These 77 million people owe an average of $5,178 to collections, and credit issues of this magnitude can prevent people from getting a job, vehicle, or even a home.  At Neighborhood Housing Services, we work with our clients in our Financial Fitness Coaching Program to help resolve credit issues, coach them on how to negotiate with creditors or debt collectors, and empower them to take control of their finances. 

Apryl, our NeighborWorks trained financial counselor, takes time to sit down with her clients and makes a list of financial goals they would like to achieve – using the S.M.A.R.T. goal criteria.  In order to work on these goals, both Apryl and the clients need to know what the clients’ current finances look like. So, one of the first steps she helps them take is accessing their credit report.

Accessing your credit report is easy.  While there are several online options, there is only one website that is both free and sanctioned by the federal government.  It is www.annualcreditreport.comSome financial advisors say staggering your requests [from all three credit reporting companies: TransUnion, Experian, and Equifax] during a 12-month period may be a good way to keep an eye on the accuracy and completeness of the information in your reports. Retrieving your credit report is an important step because approximately 26% of Americans who, when they check their credit report, discover that there’s a potential material error on the credit report.  There can be a lot of possible inaccuracies when a creditor sells their delinquent accounts to a debt collection agency, so it’s always best to double check your report.

If there are inaccuracies on the clients’ report, Apryl empowers them with the necessary tools to dispute the matters.  She offers them template letters that they can use as a guideline to explain the erroneous situations to the credit report company in a professional manner.  This is a tool they can use on their own if they encounter a similar situation in the future.

Of course, many of the items on a credit report are legitimate and need to be paid off.  Bills that are at least 181 days delinquent are often sent to collections, so you have [a] much better chance of resolving something in the first 180 days before it’s sold off to somebody else.

In cases where the clients are behind in their payments, Apryl coaches them how to negotiate with creditors and debt collection agencies – providing them with a script of effective ways to works with the company.  For those clients who need additional help with the script, she may even role play a collections call with them to give them practice for the actual encounter with the creditor.

Each client faces a unique financial situation with differing goals, and there is not a “one size fits all” approach to the Financial Fitness Coaching Program. Debt collection is just one aspect of the coaching process, but others may have goals for retirement, saving for their child’s college fund, or even homeownership. Apryl offers empowering tools and techniques that can help clients with any of these goals work toward a more financially secure future, but the pace of this process is completely based on the commitment and work that the clients are willing to devote to it. 

At Neighborhood Housing Services, our free, one-on-one Financial Fitness Coaching sessions are designed to build clients’ confidence in effectively dealing with issues like those annoying collections calls – leading to more fiscal stability and peace of mind as the debt collectors remove them from their lists.

For more information about our Financial Fitness Coaching Program, visit our website.  You may also call or email Apryl at 258-6217 or FinancialFit@nhsid.org.

Pictures accessed at:

http://bps-occupational-digest.blogspot.com/2012_04_01_archive.html

http://www.istockphoto.com/photo/past-due-credit-card-bill-15377117

http://www.lynchsharp.com/what-do-i-have-to-provide.php

http://www.nhsid.org/what-we-do/financial-fitness-coaching

http://www.careers.qut.edu.au/newsletter/student-enews/2010/index_Dec.html

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