Tips for Negotiating with Debt Collectors
Posted on: 18 October 2016
If you have gotten yourself in trouble with overdue debts you may find that your debts get sent into debt collection and you start being contacted by a collection agency. If you would like to negotiate with the debt collection agency to get some relief here are some tips.
Understand your rights
If you are getting disturbed or harassed by contact from a collection agency it is a good idea to understand your rights, and inform the debt collection agency how and when they can contact you. Debt collection agents can only legally contact you by phone between 7:30am–9:00pm on weekdays and 9:00am–9:00pm on weekends, and can only contact you in-person 9:00am–9:00pm on weekdays and weekends. There are also limits on how many phone calls or letters you can get per week from the debt collection agency each week. You also have a right to privacy and debt collectors cannot share information about your debts with other parties, such as your employers or friends and family.
If the agency is contacting you outside of these times you can contact the ACCC (Australian Competition and Consumer Commisson) to get the collection agency to give you some time to work out the best way to deal with your debts.
Understand your position
Before you start to negotiate with the debt collectors it can be a good idea to have a preliminary meeting with a bankruptcy or insolvency lawyer. Even if you don't end up filing for bankruptcy it can be useful to understand your current position and what the consequences would be if you did go down this path. This can help you negotiate from a better position, by fully understanding your options.
You may also be able to get the lawyer to help you negotiate a favourable payment plan or debt repayment. This can be useful if you are not feeling confident about your ability to negotiate with the debt collection agency.
Be clear on what you can afford
When you negotiate it's a good idea to have a budget prepared so that you can be clear on what you can offer in repayments. While the debt collection agency will want you to pay back the maximum amount as quickly as possible, any payment is better for them than you declaring bankruptcy and them not receiving any repayments.
Debt collectors are not as scary as people make them out to be. Once you know this information, you can successfully work with them to overcome your financial problems.
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