Credit Card Debt Survival Guide

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Chapter 2: There Is Debt Relief in the Large Number of Credit Card Accounts in Arrears
This is what the credit card companies and debt collectors do not want you to know. This is why resisting debt collection attempts properly is usually successful.

How much money can they get from you? scroll down

If you are unreachable by phone then you present less of an opportunity for the collector. scroll down

You are one of thousands or more . . .

The collection agencies, collection attorneys, even the credit card companies do not go after individual debtors, they pursue digitized batches of accounts numbering in the thousands or tens of thousands. According to a former credit card bank debt collector at in-house collection department, accounts are batched together by their number of months in arrears. Then, they are loaded into call center databases and automatic dialers to feed the salaried collection representatives taking the next automatically-dialed call as they hang from their last call. There is no ONE person handling your account and continually calling until they get you. If and when someone does get you on the line, all they know about you and your account is what is on the computer screen in front of them. Their job is to contact you. Actually collecting from you would be a bonus. They know that your account will charge off after six months. They realize that the closer you get to that six months, the less chance they have of bringing you back into the fold and getting you on a payment plan.

When a charged off credit card account gets to collection agency, their call center reps are usually commission paid and therefore hungry and aggressive. Going in, each collector knows they are not going to be successful with each account. Some individuals will resist their collection efforts, while other people they actually get on the phone will, after a few choice debt collector lies, admit their debt and cave into a payment plan they cannot afford, sometimes with interest and penalties for more than what they owe.

In collections operations, it is simple economics. Where should the collectors devote their resources . . . to the dozens of difficult accounts who, like you, are resisting or to the potentially thousands of easily converted accounts? If you do not admit to your debt, and if you dispute it (As I will show you in the debt collection chapter.), the commission-paid telephone debt collector is going to move onto to an easier mark. They want to earn a commission, and apparently they will not get it from you. This is particularly true when they are working for the credit card bank, the original creditor, on a 15-30 percent commission shared with their collection agency. They are not making much money so they need to get to the easy targets.

This behind the scenes reality may not be evident to the credit card account holder receiving the phone calls. To you it will appear they are continuing to pursue you. And they are . . . going through the motions. You are still in the automatic dialer. You continue to get phantom phone calls or a collector on the line, but you continue to deny and dispute, In return they threaten legal action, and cause you indigestion.

Credit card accounts usually charge off after six months then, within the year they are sold in batches of tens of thousands or even millions for pennies on the dollar to junk debt buyers.
Junk debt buyers motivate collection agencies with very favorable commissions to collect on these debts. Sometimes the junk debt buyer is a collection agency. If each debt is bought for ten cents on the dollar, collecting from 30 or 40 percent of accounts in a batch of junk debt can be very profitable. So what about the other 60 or 70 percent? Apparently, there is a lot of room for hit or miss. So, why spend ANY time with those few account holders, who are denying and disputing?

How much money can they get from you?

Credit card banks, junk debt buyers, collection agencies and collection attorneys will check your credit report attempting to get an idea of what you have for assets looking for a mortgage and home equity loan. They will look to see if you are paying your other debts.
If you obviously have no money and you resist collection, they will probably spend their time with more promising prospects. If you appear from your credit report to be a promising prospect, they will try harder to collect from you. But, they will still gauge your resistance and wonder about whether the return on their investment of time is worth all the time you are costing them.
If you resist debt collectors, you will survive them financially because they will focus their resources on delinquent accounts where the most weakness and opportunity lies. They know they cannot collect from everyone, so they put their time where they can make the most money.

If you are unreachable by phone then you present less of an opportunity for the collector.

These collection agency collectors welcome fresh “meat,” that is new batches of debtors. The best time to catch a debtor off guard and the hardest time for him or her to deny and dispute is on the first “ambush” call. This call usually happens before you receive your mini-Miranda notice from the new collection agency telling you of your right to dispute the debt. The ambush call usually starts with the big lie, “I am calling to let you know that your court summons for [this debt] is going in the mail in a few days. This is your last chance to pay the debt or set up a payment plan with us.” Now they’ve got you scared. And, NOW they get you to admit to the debt and to share personal information, your SSI number, even your bank account number so they can quickly receive money to make the phony lawsuit go away.

This approach has frightened all of us who have been there. You have to remain strong. You have to deny and dispute. After all, this is just a voice on the other end of the line who could be anyone. They have no legal standing with you. Your personal finances are none of their business. You have NOT received a mini-Miranda notice from their firm. Tell them these things, then hang up the phone.

To show the least weakness and present little opportunity, the best thing to do is not answer the phone when a collector calls, or hang up when they identify themselves. There is no need for telephone communications with anyone collecting a debt. There is no legal substance to most telephone communications. To pursue you legally, they must notice you in writing. You do not have to talk to debt collectors. And, you shouldn’t because they will lie and say anything to scare you. The reality is because there are so many credit card accounts in arrears, they will move onto the next debtor and try that lie again looking for more success.
Last, do not make the mistake of confusing telephone communications with written communications. Always respond to debt collector written communications. Use the response guidelines in this book.

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