Debt collection brings out the worst in us

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Dear Debt Adviser,
I read your column this morning regarding being ill, off of work and still responsible for your debt. This is my situation exactly — off of work for 1½ years, waiting for approval for disability and a husband laid off. I recently called one of my creditors and offered what I could pay per month. This was not acceptable to that creditor and we ended up in a heated discussion, with them calling me irresponsible and not wanting to make a commitment to paying my debts. I finally hung up, very frustrated and sorry I even called.

What do you do in a situation like this? We are struggling just to pay our regular monthly bills, with my husband collecting unemployment and our income cut in half, and we’re not taking on any “extras.” What I was offering was a very small amount, but I thought it would be showing them I was trying. Thank you.
— S.J.

Dear S.J.,
I can tell you are trying to do the right thing. In your situation, any payment is a hardship. To have your offer rebuffed must have been very upsetting. The easy answer is to commiserate with you and label the collector as a dirty rat. But, as with many things, the reality behind your conversation is more complicated.

A conversation with creditors or collectors for persons in situations similar to yours is often not productive for either party. The reason is you have a small amount of money that you can pay and you can’t pay anymore, but the creditor/collector is unable and/or unwilling to accept that small of a payment. Therefore, you both become frustrated fairly quickly because neither party is able to compromise.

When any of my readers find themselves up against what seems a brick wall, I suggest they thank the person on the other end of the phone for going as far as they could and ask to be transferred to a supervisor or manager. An upper-echelon employee may have more flexibility in temporarily accepting smaller or hardship payments. Getting into a heated discussion is always a loser for the person owing money. Just don’t go there.

It might help if you imagine the situation reversed. Let’s say you have a 30-year fixed mortgage, and you get a call from the bank, saying it’s having trouble and is increasing your payment. Chances are if you called them names and they yelled at you, you still would not agree to a change in payments.

So, in the end, without the required monthly payment and in the absence of being approved for a hardship program, you have two choices. File for bankruptcy, or wait out the legal process that will follow in hopes that your situation will change for the better and you’ll be able to pay the money you owe.

I suggest that you have a talk with an attorney about your options under bankruptcy. If you decide not to file for bankruptcy, be sure to appear in court should your creditor(s) decide to sue you and to bring your attorney with you. You and my readers may be wondering at this point how you will afford an attorney when you cannot afford to pay the debt. The answer is most of us either have a relative or a friend who is an attorney. Failing that, you may be able to find an attorney from your local legal aid organization or ask for help at your local bar association.

In the final analysis, you can only do the best you can. If it’s just not enough, then you are right, there is no point in talking about it further and getting more and more upset. I suggest you bring in a professional and do what is in your best interests.

Good luck!

To ask a question of the Debt Adviser go to the “Ask the Experts” page and select “Debt” as the topic. Read more Debt Adviser columns and more stories about debt management.