How To Negotiate with a Collection Agent

How To Negotiate with a Collection Agent - Debt Free In 30 - A Personal Finance Podcast - Ep 264. Phone calls from a collection agency can be very stressful. While it’s not fun dealing with collection agents, it is possible to work with them to minimize stress and frustration. On today’s podcast, our guest is Blair Demarco-Wettlaufer, Managing Partner at Kingston Data and Credit, a Canadian debt collection agency. Blair explains how debt collection agencies make money, how they receive files, when legal action to collect on debt would take place, and he gives listeners practical advice for how to negotiate with a collection agent. Tune in.
Helpful Resources
Blair Demarco-Wettlaufer’s website: receivableaccounts.blogspot.com/
Stop the Collection Calls: Advice from Blair Demarco-Wettlaufer: www.hoyes.com/blog/stop-the-c...
Can a Collection Agency Sue You in Canada? www.hoyes.com/blog/can-a-coll...
Exposing Collection Agencies’ Dirty Tricks: www.hoyes.com/blog/collection...

[@brizzchizz7302]

I am in BC received a collection agency notice for a little over $3grand from a closed BMO Mastercard from Common Collections Agency in Ontario. How should I go about this as I am currently not working and am struggling with paying other debts at the moment. I want to be able to negotiate something whereas can not affect my Credit and am showing I am willing to put up what I can thanks

[@JDouglasHoyes]

If you are not currently working, I'd start by telling the collection agency that you aren't working. They will still want to collect, but it's less likely that they will start legal action against you while you are unemployed. Once you are back to work, you can decide on next steps (depending on your income, and other debts).

[@brizzchizz7302]

@@JDouglasHoyes Thanks. So based on that $3200 owing seems small to take legal proceedings no? Collections contacted me 2 days ago with what seems like a higher number from my bank statement. Also, can I still pay it off with the original creditor (BMO) through an individual settlement? This is all helpful as I am bit stressed at moment Cheers

[@nicoleward126]

I’ll repeat for the people in the back DONT GIVE THEM YOUR DEBIT CARD INFO OR BANK ACCOUNT INFO”!!!

[@dcsconsumerreviews1632]

Then how do you pay ?

[@nicoleward126]

I would pay with a cashiers check or money order.

[@Darrin.Crawford]

@@dcsconsumerreviews1632 You can pay by THEIR specified bank account. They give you a number.

[@walkaway.]

@@dcsconsumerreviews1632 prepaid card

[@delandgoon]

very helpful video

[@BaronBrand]

Thanks for having me on your show Doug, I very much appreciate the opportunity!

[@brittanywoodson3173]

Blair DeMarco-Wettlaufer Blair DeMarco-Wettlaufer what if a debt is 5-6 years old. What percentage would be reasonable to settle?

[@BaronBrand]

@@brittanywoodson3173 depending on who the creditor is, and the balance, anywhere from 70% down to even 50%. It doesn't hurt to offer a lower amount ... the worst they can do is say no.

[@brittanywoodson3173]

Blair DeMarco-Wettlaufer thank you!!

[@WolfMusicIndia]

How do collect debt without voilating fdcpa any loopholes

[@BaronBrand]

@@WolfMusicIndia The FDCPA is a US Federal law, and this is a conversation about Canadian debt. The FDCPA doesn't have "loopholes" but lists some basic federal processes to give the consumer fair notice and not use unfair or deceptive practices ...

[@laylam4241]

Excellent video, thank you

[@ericsingh2588]

This video is vary good to watch and know keep it up guys:)

[@TheOne-ry6mt]

In the US the statute of limitations on debt is different in every state. Google your states time frame. Also in the US late payments, collections, charge offs, settlements, foreclosures are on your credit reports for 7 years after the date of first delinquency. Bankruptcies are 7-10 years. :)

[@BaronBrand]

Agreed! And the statute of limitations in the states can vary based on the type of debt or contract ...

[@ashleyshoop3146]

I thought I would lose my house and resort to sleeping in my car because I was caught up in a lot of credit card debt and my credit score was a laughable 450. Hiring the services of Andy Lucas and his team has been the turning point of my life and it is the best decision I made this 2020. Thanking his team alone doesn't do justice to how great an impact their professionalism in doing their job has taken me to a healthy 810 credit score in a month and a half since using their service. I am no longer in debt in this trying times I cannot thank them enough.{[e-mail]} to get in contact with them. Trust me if you are in any financial trouble you will be glad you contacted them, they literally turned my life around for better

[@cxx1953]

Bankruptcy is only 2yrs now

[@shericeharper2]

@@cxx1953 since when? Cause I filed in 2013 and it won't be off until 2023

[@jrockaz548]

You can call them and mention that u want to settle it and get it removed and if that isn't an option then maybe it might be best for you to file bankruptcy mention of bankruptcy gets them in a dealing mood

[@BaronBrand]

Absolutely, you can always ask. However, the credit bureaus don't like agencies negotiating 'pay for delete', so they might not be able to ... not because they are being difficult, because they are following the rules of Equifax and TUC

[@jrockaz548]

@@BaronBrand in my personal experience the mention of bankruptcy gets you transferred to a manager and after that it's just a matter of price some will do it for settlement amount others for full amount but yes never hurts to ask

[@jessebirsty2752]

Not sure about that… I was a debt collector for a few months and we had a script whenever someone filed bankruptcy to tell them their acc was on hold

[@kirashirou904]

@@jessebirsty2752what does on hold mean? they don’t have to pay for a while? i’m just wondering bc im expecting a call bc CarMax sold me a dud that they had to fix the first week I drove it, $20k+ and won’t take it back so I refuse to make any more payments and expect my down payment back.

[@MrTommyboy68]

I am retired. My ONLY income is Social Security and I have no assets. So I tell them I will see them in court. Besides they buy these debts for 1 to 10% of the amount due. Everything they bring is is all gravy after the first percentage and they will make your life miserable. Your charge off stays on your credit report for 7 YEARS. Once it's in collections, THAT stays on your report for 7 YEARS ALSO and the clock starts. So you are bagged for at LEAST 7 years, usually 8 to 10 when you factor in the start date of the collections. Besides, I am 66 years old. I am never going to buy a new car, house, take a vacation or get any other credit cards.

[@BaronBrand]

The clock shouldn't be reset, it's just 6 years from the date of first delinquency (DFD) on the bureau.

[@anthonygarcia1434]

Yes never give them your checking account

[@ronquinton7470]

From my experience, my situation wasn't a concern for the "human being" that was trying to collect. Agencies and their representatives are hostile and really don't care about my situation. Essentially, they have the attitude...pay up now or your going to jail.

[@daleval2182]

In Ontario, if an old debt is more than 2 years, and they didn't file a lawsuit, it's something they can't collect, but you must defend yourself, if they try and take you to court after 2 years, know you're rights

[@BaronBrand]

You are right about the legal statute of limitations being 2 years, but the agency can still affect your credit rating for 6 years from delinquency, and can still attempt to collect.

[@Darrin.Crawford]

@@BaronBrand Just to clarify. Is the legal statute of limitations being 2 years based on the very last payment to the creditor OR the date of acknowledgement of the said debt "only" via phone and/or email to the collection agency?? Thanks in advance.

[@BaronBrand]

@@Darrin.Crawford two years from the last payment or written acknowledgement of the debt. It could be an email, but it would have to be an explicit acknowledgement ... a message saying 'what is this all about' or similar wouldn't count.

[@Darrin.Crawford]

@@BaronBrand Thank you for getting back to me. I have a scenario for you, may I reach out to you privately??

[@censiblelife]

When you received a summon from the debt collector, or representing lawyer, and call the debt collector and made an arrangement, what happen to the summon filed? Do the defendant still need to respond thru the court?

[@jeaneamccall863]

No, it is the debt collectors responsibility to notify the court, because they are the ones who filed initially.

[@BaronBrand]

First, make sure the statement of claim is actually filed with the court. If it is, in Ontario your arrangements should be filed with the court to prevent judgment -- it's called Minutes of Settlement.

[@robdahood439]

It’s better to be safe than sorry. In the USA if you don’t get a letter from the court saying so I’d show up to court to make sure 100%

[@atmart619]

You didn’t ask about pay to delete?

[@TheDjcarter1966]

Canada laws different...also NEVER GIVE THEM YOUR CHECKING ACCOUNT ACCESS.

[@Joe-wq4mo]

What if you already gave them the info? What would you say are the steps after that??

[@ReidRed1]

Why do companies like GoEasy and others ask for this info?

[@BaronBrand]

They ask because they want to set up a pre-authorized payment plan. They have to have your consent before pulling a single or recurring payment.

[@Cris-hk4cn]

Are these debt purchase by the collection agency?

[@so8154]

hi ! any advice for a third party collection agency tath added INTEREST on my dept , wath should i do ;(

[@jrockaz548]

Do they list it as interest or fees

[@BaronBrand]

Depending on the interest rate, it can add up quickly -- but they can only add interest if it was in the original contact or invoice.

[@albertcordeiro4807]

Excellent video! Quick question. Should I accept a settlement offer from a collection agency and pay it, or don’t pay it. And will it start my statue of limitation all over again? And will it affect my credit. Thanks

[@BaronBrand]

If you are going to pay a settlement, get a conditional letter of release first, that way you aren't trapped into a renewed statute of limitations. Payment or settlement will improve your credit score, but to what degree the credit bureaus are not very transparent on.

[@jrockaz548]

Really depends on the rest of ur credit if that's the only one then yes it will of u have 2-3 others then not really but most not all u can negotiate to make a lump sum and get it off ur credit just get it in writing

[@xo7454]

​@@BaronBrandcan I speak with you and get your insight please? TIA

[@traceysparrowhawk945]

If a law firm is involve, but the credit card company has sold the debt to a collection agency, who do you deal with?

[@BaronBrand]

Collection agencies hire law firms, so them ... but shady collection agencies use letters that look like legal demands, be cautious, and look up the lawyer on the Law Society website.

[@rebeccalwhitcher]

If I have a trial court date already set, can I still call and settle my debt? Maybe try a little sum pay off?

[@BaronBrand]

Yes, but if they agree, get a Minutes of Settlement or other paperwork showing the debt is going to be forgiven before paying.

[@rebeccalwhitcher]

@@BaronBrand thank you!

[@avilacharro73]

I owe $1700 on a car loan. charge off collections. from 2019. Can they sue me? Ican negociate that amount. how much can they come down?How much can I offer them?

[@realjamesbowned]

I used to owe Telus 900$ back in 2016 went to collections and 5 years later the agency is now asking for 4000$

[@BaronBrand]

Yep, that's the danger of interest on a debt, it compounds. It sounds pretty high though. Ask the agency what the interest rate is and ask for a full statement of the debt and how they got that balance.

[@siddhartha603]

What’s the difference between delinquency or a judgment

[@BaronBrand]

A delinquent account is outstanding .. A judgment is after the account is taken to court and the judge awards in favour of the creditor. Judgments can be used for debtor examinations, garnishment, writs and liens ...

[@lindaoeder5214]

What do you do about a medical bill that was 25 yrs old that was not even your debt, you believe this was fraud as they shows cities or address you never lived at at time of service. A family member had identity theft more than 15 yrs ago. Addresses of states and cities you never lived. You have filed police reports, what do you do to stop it from affecting your credit?

[@brewanalysis2764]

You are not responsible for the debt. www.identitytheft.gov/know-your-rights

[@BaronBrand]

Brew is right, and a debt that is over 6 years old should never appear on your credit rating. Get a copy of your Bureau from Equifax and Trans Union, and if it is on there, file a dispute.

[@ZachNasty]

No collection agency is "fair" loll they make it seem like they wanna help you,. Its not that simple,. Never ever admit you owe a debt until you know for sure all their info is correct,. They can easily bump the price of the debt from fees and legal fees,.

[@bsharp1981]

Hmm no you don’t have to admit you owe the debt or not if it’s linked to your social security number you not saying that over the phone means nothing. Also no they don’t bump up the amount owed. If you owed $1000 to the original company when it goes to collections you owe $1000 only difference is you can settle because they paided way less fir it so they can profit of it still. As for legal fees that is only tacked on if it actual goes though judgment. Was a collector of 10 years you are thinking of debtor myths. If you dint care about your credit then don’t pay

[@BaronBrand]

No, it's illegal to artificially increase the amount of the debt. And some agencies do want to help other people, go look at Kingston Data + Credit's Google Reviews from consumers.

[@BaronBrand]

Bruce, in Canada it's social insurance number, and debt buying up here is far more rare. Sounds like you and I have had very different experiences.

[@wesspetterson9151]

My us cellular bill just went to collections for 4000k for 5 lines I just got out of bankruptcy what can i do? Negotiate with the collector to keep it off my credit report and maybe a payment plan?

[@jrockaz548]

That would be my guess who ever did ur bankruptcy should of included that in it

[@BaronBrand]

If you incurred the debt before the date of bankruptcy, it's included, whether they were on the list of creditors or not.

[@jrockaz548]

@@BaronBrand I guess it depends what state because I personally know a guy that filed bankruptcy but went with this budget lawyer and they left. Couple debts off the list n he ended up having to pay those

[@BaronBrand]

My knowledge on bankruptcy is mostly Canadian. You're probably right, and if this is a US question, best check in with a local attorney or trustee ...

[@DJ-rx8mv]

dude tell them you can pay 5 bucks a month. like literally tell them that. whats the worse that happen? trust me, ive done it. make up a story. if you don't feel like doing that, offer a lump sum like 1/3 of what you owe. then stick to that number

[@annamay520]

One card was 400 dollar limit. It has now sold to another company with a 800 dollar balance. What can i do? What should I do? This is the only thing left in my report to fix. Also...if I settle for half of that... Will that affect my score?

[@BaronBrand]

Hey there ... if it has been sold to a debt buyer, you probably already have a hit on your credit bureau, either through a tradeline or collection item, so settling will improve your score. Can't hurt to offer, worst they can do is say no.

[@or1946]

Reply Back to you’re comments?

[@BaronBrand]

Hi TC, I don't always get notified of comments ... I'm not with Hoyes Michalos, but I was the guest speaker, how can I help?

[@ay7407]

i have $120K in debt with 5 major credit card companies. How do I pick who to negotiate with?

[@BaronBrand]

With that much debt, you might be better off with a licensed insolvency trustee helping you. But if you want to go it on your own, start with the biggest balances and work down, and see if they are receptive.

[@jrockaz548]

With that much unless you have a substantial amount of investments property etc bankruptcy is probably the best option just wipe out the debt and start fresh.

[@larrylucas5731]

What about USA laws?

[@BaronBrand]

USA Laws are completely different. The Fair Debt Collection Practices Act (FDCPA) governs US collections, plus any state (or city) laws. So it depends where you live.

[@jrockaz548]

You pretty much have to look up laws in ur state because they vary greatly

[@2panther955]

["False info as far as a third- party agency that has no skin in the game and no wet-ink signature for the original contract. If they take it to court, ask for the original contract under penalty of perjury because you don't know who this is standing before a judge🤔 It's called fraud. The debt collector has NOT suffered any injuries. Interest can only be charged for money lend to a person. Do NOT contract via phone or otherwise. Why do you think these companies have a PO BOX? A PO BOX is not a contracting venue nor is email. If [they] send you mail, do NOT open but return to sender stating NO LIABILITY, NO ASSURED VALUE, NO INTERNATIONAL TREATY."]

[@BaronBrand]

Hi Sean ... yes, if a claim is filed in court without a copy of a statement or contract, you can ask for it as part of a defence. Yes, interest can be requested in a court claim, if supported by a contract or invoice that states the terms clearly (with an annual rate), regardless of a loan or services rendered. If there isn't a request for interest in the claim supported by documentation, the court will award a standard post-judgment interest rate. I"m not sure what you are getting on about regarding mailing addresses ... Collection agencies in Canada must advertise a business address open to the public, not a PO box.

[@so8154]

isnt illegal to add interests . my original creditor tells me there no interest and the agency collector tells me there is !

[@BaronBrand]

That would be illegal -- if there isn't interest on the original contract or invoice, the agency cannot add it. Good for checking with the original creditor!

[@lizzywingo]

Vance please take my power of attorney and assignment of claim in a medical debt collector that has violated the fdca and I was never given itemized BILL, AND IT WAS NEVER submitted to my insurance( I am a senior taken advantage of. I know the outcome will be a load off of my mind, and I need help, Please call and I will settle with you.

[@claydouglas9689]

How do you find out what a collection agency buy your debt for?

[@BaronBrand]

They are unlikely to ever say, but it could range from $0.001 to $0.09 per dollar.

[@SCL-in7pm]

Can they sue for $100 dollar account debt?

[@brewanalysis2764]

They can sue for any amount, but for the paperwork, legal fees, and time involved, it is rare to do this for anything under a few thousand dollars. I've heard Capitol One will sue for small amounts. Some places might threaten to sue for a small debt, but it is often only a scare tactic. If you owe the bill, you should pay it.

[@lindsaybriggs3160]

I get what you're saying. I was just sued or receive some paperwork that looked like it came from the courts just in the mail and it was a medical bill or charge. And I you called them they told me that I had you either pay the amount in full which was now more because of interests and also pay for the filing and court fees that they had already done I am gone through the courts and that I owed that money and I could take care of it now. Or if I went to court, waited did not pay all og that right now then they said they'd go to court and not only would I be liable for the bills, interest, late fees and lawyers/filing fees but also i would then have to pay all fees for the court date..for the lawyer the fees everything..so it was just going to be more money every way i looked. I'm on disability which is why I couldn't pay the $3000 bill in the 1st place so with late fees int'rest court fees and then additional court fees and more interest now it's gone up another 1500 and counting I don't know what to do and I think they said that they could garnish my wages but I don't know if this is true I am in Jefferson County Colorado witches near Denver does anybody know anything help!

[@brewanalysis2764]

@@lindsaybriggs3160 Depending on the state, lawsuit papers must be served in person and someone over 18 has to sign. I haven't heard of lawsuit papers sent via regular mail but some states might permit it. I looked up Colorado law and it says lawsuit must be delivered by personal service (meaning handed to you), or may be done in mail in certain circumstances. Service by mail requires court approval. Are you positive the papers are for a lawsuit? It might only be the threat of it. Is the medical bill valid for service you received? As for them saying you would be responsible for the bill, interest, and other fees, first they have to take you to court, win the judgment, then wait 30 days to execute it. Would they win? Possibly, if the bill is valid and if you have not made any effort to pay. However, keep in mind that disability checks cannot be garnished for certain things, like credit cards and medical bills. That is Federal law. What I recommend is offering them a settlement of 20-30 cents on the dollar out of the $3000, so somewhere around $900. They will likely reject your offer several times before eventually taking it or making a counteroffer. Think how many people ignore them and don't even make an offer. Note that I'm not a lawyer, this is not legal advice, but I've been through some of what you describe, and I know someone going through collections right now.

[@brizzchizz7302]

@@brewanalysis2764 Ok good advice. I am in Canada on hook for $3200 MAstercard got an email other day saying have 10 days to pay in full OR NEGOTIATE A SETTLEMENT thru a Collection Agency. Been unemployed for sometime now would they file a lawsuit over that much?

[@andrianstefanus3958]

This guy needs to call everyone thats in debt

[@BaronBrand]

Andrian, that's incredibly kind! I've been in the collection industry for 30+ years, and this has always been my approach ...

[@anthonywhite9828]

I recommend a very good specialist Michael Gibbs [[e-mail]] who helped me so much to improve my credit score and removed all negative items that I didn’t want. My score was 510 and after 9 days it was boosted to 790. I was very pleased and desire to share this with the world. I was not sure he would actually do it because I have been scammed twice. He told me all I need to do which I humbly did without hesitating in less than a week I saw the miraculous job, I couldn’t believe it. And I got a mail from credit bureau confirming the good job he did. Contact email [[e-mail]] Cheers.

[@BaronBrand]

@@anthonywhite9828 CreditPatchUp is a US company, to my knowledge they do not have access to Canadian credit bureaus.

[@anthonywhite9828]

@@BaronBrand they do

[@BaronBrand]

@@anthonywhite9828 Here's a general overview of credit repair that's accurate in Canada, and reflects the Consumer Reporting Act rules here that guide Equifax and Trans Union Canada. www.creditcardscanada.ca/education-centre/credit-reports-scores/pay-use-credit-repair-services/

[@JaminSpanky-xt4zw]

Can Collection agency have the right do a knock knock on the door

[@BaronBrand]

Depends where you live, each province has different rules... Generally yes they can, but it's not a good use of their time...

[@kirillm6]

All the collectors are only callers and nothing else! Don't be scared thats what they want.

[@BaronBrand]

Kirill, some agencies that's true, but others have the ability to affect credit, or prep the file for a paralegal/lawyer, so it doesnt hurt to have a conversation about a legitimate debt, as long as both sides are professional and listen to the other side.

[@kirillm6]

@@BaronBrand the way they talk is not acceptable they trying to scare you .

[@BaronBrand]

Some do, and that's wrong. I prefer to lay out choices for the consumer, and let them decide.

[@kirillm6]

@@BaronBrand they should say something that they can do but most of the time they just trying to scare without possibility to do anything and that when I can say them what I wont.

[@BaronBrand]

Right ... and that's not legal ... I've written a lot of blog articles over at receivableaccounts.com trying to stop these bad agents in our industry and help consumers know their rights ...

[@mussersbowsboatsandscience6610]

Keep in mind this a collection agent trying to pull out of you for debt they bought for pennies on the dollar. He is not your buddy.

[@mussersbowsboatsandscience6610]

sure pay us $100 a month on bad debt that will last forever for pennys on the dollar debt purchase

[@daleval2182]

He really likes his job, that's creepy, and doing it 30 yrs, lol

[@BaronBrand]

Not creepy, just trying to make my industry a better place. No one likes collection agencies (and that's okay), but we actually help people get out of bad situations, and try to be fair. We don't attempt to lie or collect on 'zombie debt' and my blog has all sorts of consumer information.

[@daleval2182]

@@BaronBrand was just kidding bud, you seem pro at what you do, somebody has to, I met a bad one once, did help me at all, except cause pain in a bad time, thx

[@BaronBrand]

Dale, no offense taken. My industry has a bad rep for a reason, just trying to change it one person at a time :)

[@daleval2182]

@@BaronBrand thanks bud, can you share a contact email, would pay to consult, I'm trying to retire in peace, could use a coach

[@BaronBrand]

@@daleval2182 it's [e-mail] and no charge, happy to help where I can.

[@robdahood439]

This guy is about as likable as Ted Bundy.

[@BaronBrand]

It's okay if you don't find me or my profession likeable ... but I am trying to be fair and help people understand their debts.

[@shelenajohnson1400]

@@BaronBrand Thank you for your expertise. I have 3 debts in collections. I'm want to by a house this year. Do you think I should contact the collection agencies and try to negotiate settlements or do I have to pay in full or I won't be able to get a loan for a home?

[@BaronBrand]

@@shelenajohnson1400 Settlements will likely work, no harm in reaching out to the agencies to try to negotiate ... definitely get them cleared at least 30 days before applying for mortgage pre-approval.

[@shelenajohnson1400]

@@BaronBrand Do you think I should get a debt validation letter first and what is the best way to get them to remove the collection and not sell the debt to someone else?

[@BaronBrand]

@@shelenajohnson1400 ah, if you are in the US, yes a debt validation request is perfectly reasonable. It will show the current creditor and original creditor. Nothing prevents a creditor from selling a debt, but if the agency has the file flagged as a 'promise payment' odds are it won't change hands.

[@elizabethestrada8350]

I think this video is BS