Debt Settlement Mathematics: 2 + 2 = delinquent

If you are new to the blog, click HERE to start at the beginning of my story.
POST #17
So here I am in the middle of the story.  It’s a waiting game, but not without excitement. The collections calls have accelerated to 3-4 times a day and the letters come 2-3 times a week.
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I have repeated my story dozens of times to dozens of different representatives.  After consulting with my CRN rep, we decided to pursue one of my accounts more actively because it was accelerated to charge off .
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The bank normally delays putting accounts into charge off for about 150 days, BUT they have the option of doing it earlier.
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I kept track of how the accounts were progressing but the rules seemed to keep changing. I’d call on Monday and they’d say I was 120 days late and charge off was in 30 days. Then I’d call again on Friday, 5 days later, and they’d say the account was 143 days late and charge off was in 17 days. If you ask me, that’s funny math…..and we all wonder why our numbers in Quicken or Quickbooks never match the bank’s numbers!  The reps were just playing games to scare me into making a payment. Nice try!!!
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Regardless of their math, I kept calling every couple of days and kept careful notes. I knew a settlement was imminent. This account had a balance of about $20,000.  I would offer $5,000 as a settlement, and they would counter at $15,000. Every rep said that even if they could get a manager to approve a lower offer, they had never seen a settlement for lower than 60% or in my case, $12,000.
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That was a BLATANT lie.  Banks regularly make debt settlements for 25%-35%, but each department has certain restrictions. The Collections Department usually can’t go lower than 50%. However, once your account moves to charge off, the rules change.
On November 25, 2009, I made my final call to the Collections Department.
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WASHINGTON - NOVEMBER 20: A turkey named 'May'...

Then next day was Thanksgiving.
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I decided to take the day off from calling the bank, knowing that on Friday, I would call the Recovery Department. Truthfully, I was hoping to cut a deal prior to Thanksgiving so that I would have something to celebrate, but it all worked out for the best. In fact, my CRN rep encouraged me to fold my Thanksgiving dinner into the next conversation with the bank.
Stay tuned. Stay afloat. Wealth and freedom are in your future.
Jonathan

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Debt Collections Calls – the first 30 days

If you are new to the blog, click HERE to start at the beginning of my story.

POST #11
In mid August, I made my first calls to the bank explaining my situation. Was I nervous?

HECK YEAH!!!

This was the first of many pro-active calls I made.  I had written a cheat sheet to make sure the call went smoothly.  Here’s what was on it:

  1. Stay calm, sincere and friendly.

  2. Keep the call short and direct.

  3. Explain that I am experiencing a financial hardship.

  4. Explain that I am father of 2 and husband, doing my best to take care of my family.

  5. Don’t offer any information regarding my specific place of employment.

  6. Don’t make a payment. Never. Ever. Ever. Ever. JUST DON’T DO IT. This will kill the process and you’ll have to start over again.

  7. Don’t allow the rep to get me angry or defensive.

  8. Don’t mention debt settlement yet!!!!

All of the above was true for me. This is an important aspect of the debt settlement process. You are telling the bank a TRUE story. If you start lying, they will likely catch you and the process will crumble. As a reminder, debt settlement is NOT a way to avoid your debts. It’s a way to recover from financial hardship while attempting to offer your bank a portion of the money owed.

Image by oceandesetoiles via Flickr

During the call, I expected to be scolded by the teacher for being extremely tardy to school.
But really, it was more like, “We understand. Thank you for your call. Let us know when you are back on your feet.”
Keep in mind, this was during the first 30 days – not serious delinquency yet.
I don’t imagine it will be this smooth for everyone, but it was for me.
Good thing I was being coached by my CRN rep, Dayna. She gave me a reality check, “Don’t get too comfortable.  IT WILL GET NASTY!” And she was right, it took another 3 months, but it got there.  And once it got nasty, it got really nasty.
Surprisingly, not all of the reps were nasty, but when you’re dealing with people, you are subject to good and bad moods. When you catch someone in a good mood, you’ll get a better deal. Bad mood, bad deal. Sounds arbitrary, but it makes sense. Sure there are settlement rules for the bank, but there is also leeway. Ask yourself this question:

Who do you think will get a better deal?

The angry indignant customer?

or

The father of 2 who is calling every 2 weeks, telling his story with humility and offering to pay a portion of the debt?

In an upcoming post, I’ll share with you what happened when I got on the phone with a collections rep who was not having a good day. Let’s just say, I used every technique in the book to land that settlement.  🙂
Stay tuned. Stay afloat. Wealth and freedom are in your future.
Jonathan

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