I can’t tell you how many times I hear this from my clients: “I haven’t answered my phone in months.” “Well why not,” I ask. “Because the creditors are hounding me.”
This is a natural reaction. Most people respond to conflict in this manner – ignore it and it will go away. Yes, it is natural but it is dead wrong. Ignoring your problems will not make them go away. If anything, it could make your problems worse. Here’s why.
What are people (anyone – your friend, your landlord, anyone) looking for when they call you on the phone. Yes, some of them want money. But besides that, what? The answer is information. They want to know what’s going on. How are you feeling? How was Aunt Selma’s surgery? How was the show? They want information. And when they don’t get the information, what do they do? The worst thing ever – they start to make assumptions and draw conclusions based upon prior experience. That is human nature. Because we have been in a situation before, we naturally expect the events to unfold in the same manner as the previous time. So, your caller will assume that since you are not answering, there must have been a complication with Aunt Selma’s surgery. Otherwise you would answer. Then they tell someone else that they are worried that they haven’t heard from you so they fear Aunt Selma may have had a complication. Bad news…. Now, when you speak with them, not only do you have to provide the missing information, but you also have to correct the misinformation.
The same thing happens with your creditors. They call, and you don’t answer. They start to make assumptions. This person is ignoring me. They do not intend to pay. The people that ignore us never pay. They must have something to hide. They probably have other creditors after them. We better file suit against this person now.
Again, this is not good. The absence of information leads to misinformation, faulty assumptions, rumors, nothing good. Ignoring your problems will not make them go away. It will make them worse.
I am an insolvency attorney. Most of my clients either owe money (the debtors) to someone that they are unable to pay or they are owed money (the creditors) from someone who cannot pay. When I am hired by a debtor, typically the first hurdle to overcome is a sense of distrust resulting from lack of communication and misinformation. In most cases, the lender has been trying to reach the borrower and they have been ignored. They have been asking for updated financials and they are getting hems and haws. The creditor was already upset because they have not been paid. But now they are also frustrated and angry. Nobody likes to be lied to. Nobody likes to be ignored.
So what should you do? First, go get a notepad and a pen and leave it next to your phone. Then, when the phone rings, answer it and use the pen and pad. Keep a log of all the calls. Get the name of the person calling, where they are calling from (most creditors will use a collection agent so it may not be the actual creditor calling), what date and time of day they are calling. And write down what they say. After you hang up the phone, keep writing – as much detail as possible. You must do it at that moment or you will forget later.
What should you say? I always advise my clients to tell the truth. Lying will not benefit you and will likely come back to haunt you. So, tell the truth: “I want to pay you. I am doing my best. I just cannot afford to pay this amount. I was laid off/hospitalized/ [insert source of problem here]. Is there anything you can do to help me? I am trying to do the right thing.” Convey to the caller that you intend to pay but you just do not have the ability to do it, and ask them for help.
Why do we keep the log? A few simple reasons. First, it may be useful later when you hire a lawyer and he or she asks “What did the creditor say?” Second, the creditor may make an offer that you later want to accept. You want to be able to say that Mr. Smith told me on March 8th that you would accept $5,500. Third, the creditor may violate the Fair Debt Collection Practices Act.[i] This law restricts when a debt collector can call you, what they can say, etc. If they violate the law, they could owe you money! Keeping a log can be very helpful.
If you cannot find a way out of the debt or you do not think you can do this – emotionally or psychologically – or if you just don’t have the stomach for it, then get help. Go see a lawyer who specializes in insolvency matters. We go by many names, including reorganization or restructuring or bankruptcy lawyers. Then, when the creditors call, you can tell them you have hired a lawyer, “Please speak with my lawyer and do not call me anymore.” And bring your call log to the meeting with your lawyer.
Remember, ignoring your problems will NOT make them go away. So, please just pick up the phone. The Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. §§ 1692-1692p, prohibits deceptive, unfair, and abusive practices by third-party collectors. For the most part, creditors are exempt when they are collecting their own debts. The FDCPA permits reasonable collection efforts that promote repayment of legitimate debts, but restricts collectors in the following ways:
- A collection agency may not contact you at inconvenient times or places. Debt collectors may not call you before 8 a.m. or after 9 p.m. unless you agree. Debt collectors may not call you at work if the collection agency is told either verbally or in writing not to call you at work.
- After you talk to a debt collector once, you may contact the collection agency in writing to request that it cease further phone calls. After the collection agency receives your letter, it may only contact you to tell you there will be no further contact or to tell you it is taking a specific legal action such as filing a lawsuit.
- A collection agency is restricted in how often it may contact your friends and family and what questions it may ask.
- Creditors are also prohibited from harassment, making false statements or threats or engaging in other unfair practices when attempting to collect a debt.