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Death of a Credit Card Balance


Dealing with collection agencies isn't pretty. Here's how I did it!


Editor's Note: Minyanville welcomes back Jessie Smith, who is sharing her journey from financial fiasco to fiscal fitness every Tuesday and Thursday in Going for Broke ... and Back.

This is Part 1 of a multi-part article about dealing with collection agencies. For Part 2 click here, and for Part 3 click here.

If you've ever been in debt or late on a payment, you've experienced the flood of phone calls all geared to finding out one thing: "When can we expect a payment from you Ms. Smith?"

There are several ways these phone calls can play out, all depending on the degree of delinquency of the payment.

"Hello Ms. Smith, this is just a courtesy call to remind you that you may have missed your payment. I can help you with that over the phone if you like."

"Ms. Smith, this is XYZ credit calling. This call may be monitored to provide quality assurance and training. Our records show that you owe $251.42, and it is nearly 30 days past due. Are you having some kind of hardship? We would like to help you schedule a payment so that you don't go over 30 days and receive a mark against your credit. Would you like to set that up now?"

"Is this Ms. Smith? This is an attempt to collect a debt. Any information you give us will be used in order to collect that debt. Your account is 60 days past due, and we would like to help you arrange payment to avoid your account being removed from our internal collections department and sent to an outside agency for collections. We have special programs for people like you who are having a hard time managing the current payments that are due. Would you like to hear about them?"

"Ms. Smith, this is ABC Debt Collection Agency. Your account is 120 days delinquent. We need immediate payment of the balance or to come to payment terms immediately. If we cannot do so, your account will be forwarded to another agency for more aggressive recovery of the amount you owe our client."

"Ms. Smith... do you have an attorney?"

Yeah. Not a pretty sight. What's sad is that the system is designed around people who created debt that they can never pay (at least not in the foreseeable future) or perhaps just don't have any intention of paying. The system was not designed for anyone who's having a little trouble getting back on her feet after an economic downturn. The biggest issue is always time, and the name of the game is "beat the clock."

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