Dear Bankruptcy Adviser,
How can I tell a collection agency that I do not have the money to pay on the debt?
-- Kim
Dear Kim,
When someone is trying to collect money from you -- money that you don't have -- it is easy to get frustrated. Collections agents can be persistent, and many of them will say illegal things to scare you into paying the debt. And at the same time you're having these adversarial conversations, you may be beating yourself up internally for being unable to pay this debt in the first place.
There's no need for that, however. Remember that you have done nothing wrong except fail to pay a debt. If you had the money, you would pay it. In the future, you will be able to pay -- but right now, you can't. It's something that happens to the best of us. For example, a few years back, Donald Trump declared bankruptcy because he couldn't pay some bills. I bet he was receiving calls from collections agents, and I also bet that he didn't let anyone push him around. You shouldn't either.
The key to handling collections agents is to be strong and repetitive. Strength comes from accountability. Therefore, I strongly suggest that you buy a phone recording device, Radio Shack makes a model for under $30. Make sure to tell the agent that you are recording the call and ask for his or her consent. If he refuses or protests, ask him why he doesn't want the call to be recorded: Does he plan to say anything illegal? Will he threaten to send a police officer to your house or to throw you in jail? Of course, the police aren't coming to your house -- the collections agent doesn't have that kind of authority. As well, you can't go to jail for debt. The point is that the stronger you are in handling the call, the more likely it is that you will get treated fairly.
Continue to get full accountability. Make sure you get the callers' full names, the companies they are working for, and the origin of the debt. Let them know that you're taking notes if you aren't recording the call.
Then, use a rehearsed phrase repeatedly in answer to their questions. You see, the collector only has one real question: When are you going to pay? Thus, you only need one real answer. Tell them when you are going to be able to pay, or simply be firm and say that you cannot. Repeat this phrase as often as necessary -- the collections agent should understand quickly that you are not to be treated rudely and that there's nothing to be gained by harassing you.