Hi,
For various reasons, many people find themselves faced with a sizable deficiency balance from a car, camper, trailer home etc., loan. In most instances, deficiency balances could be settled for far less than the amount represented by the creditors, or, in many cases, third party collection agencies. The keys to negotiating a successful settlement on a deficiency balance are:
1) The length of time the deficiency balance has been owed. If the deficiency balance has been accruing interest for many years, the creditor will take substantially less money to settle.
2) The payment history on the loan prior to the deficiency balance being created factors into the willingness of the creditor to negotiate a settlement on the balance.
If only one or two payments have been made on the loan prior to repossession, it is unlikely that the creditor will be willing to offer much of a settlement.
3) When a creditor receives a settlement offer, one of the first things the creditor does is analyze what he or she believes to be a reasonable settlement offer and the ability of the debtor to repay the deficiency balance in full. It is necessary to give all the pertinent details as to why the settlement offer is legitimate and is the best that can be done by the debtor.
4)If the deficiency balance that is owed is being handled by a third party, and the third party refuses the settlement offer, be sure to contact the original creditor and offer the same settlement to the creditor. In most cases, the creditor will accept a reasonable settlement.
5) If it is not possible to come up with a lump sum settlement, offer a payment schedule that can be kept. Once again, if the third party refuses the payment schedule, contact the original creditor and explain why that is the only available solution to handling the deficiency balance.
When negotiating any deficiency balance, keep in mind that the creditor is entitled to 100% of the balance and will only accept a settlement if it is financially justified. As soon as a deficiency balance is created, be sure to get in touch with the creditor, as communication is the key. A Performance Bond guarantees the faithful performance of the contract and payment of materials and labor by the contractor to all subcontractors and material suppliers.
Until later,
Alan
Showing posts with label settlement offers. Show all posts
Showing posts with label settlement offers. Show all posts
Tuesday, September 4, 2007
Friday, March 16, 2007
Collections
Hi,
Yesterday I talked about the importance of the debtor to acknowledge communication from a collection agency. If a person chooses to completely ignore all written communication and repeated phone calls, in many instances the collector has no choice but to turn the account over to the attorneys for litigation. It is important to realize that even something as small as an ignored library fine may be reported to a credit bureau. This can result in significant increases in the cost of everything from insurance to mortgage costs. Remember when a collection agency makes contact, they want to resolve the matter just as quickly as the debtor. So when contacted, immediate response is in the debtor's best interest. The final collection remedy I have not yet discussed is litigation. Very seldom will a collector mention legal action if he or she has not already been authorized by the client to proceed in that manner if necessary. Once an account is transferred to attorneys, 99% of the time, the opportunity for account settlement has expired. If a debtor receives a demand letter from a law firm it is imperative that the debtor communicate immediately with the law firm. Otherwise, the debtor will start incurring high attorney fees and court costs. On many occasions, people are amazed that a relatively small bill (IE $500.00) has all of a sudden grown from $1,000.-$1,500. because it has been turned over to attorneys. The easiest way to prevent becoming involved in a long arduous collection process is to respond immediately to a collection agency and resolve the account. Next week, I will talk about when businesses should submit accounts to collection agencies.
Until then,
Alan
Yesterday I talked about the importance of the debtor to acknowledge communication from a collection agency. If a person chooses to completely ignore all written communication and repeated phone calls, in many instances the collector has no choice but to turn the account over to the attorneys for litigation. It is important to realize that even something as small as an ignored library fine may be reported to a credit bureau. This can result in significant increases in the cost of everything from insurance to mortgage costs. Remember when a collection agency makes contact, they want to resolve the matter just as quickly as the debtor. So when contacted, immediate response is in the debtor's best interest. The final collection remedy I have not yet discussed is litigation. Very seldom will a collector mention legal action if he or she has not already been authorized by the client to proceed in that manner if necessary. Once an account is transferred to attorneys, 99% of the time, the opportunity for account settlement has expired. If a debtor receives a demand letter from a law firm it is imperative that the debtor communicate immediately with the law firm. Otherwise, the debtor will start incurring high attorney fees and court costs. On many occasions, people are amazed that a relatively small bill (IE $500.00) has all of a sudden grown from $1,000.-$1,500. because it has been turned over to attorneys. The easiest way to prevent becoming involved in a long arduous collection process is to respond immediately to a collection agency and resolve the account. Next week, I will talk about when businesses should submit accounts to collection agencies.
Until then,
Alan
Tuesday, March 13, 2007
Entering the World of a Collection Agency
Hi,
In yesterday's blog, I discussed some of the types of people collection agencies deal with on a daily basis. Now let's look at the mission statement of a collection agency and examine some of the common misconceptions about collection agencies. The mission statement of a collection agency is to recover as much money as possible on any account given to them by their clients. Their goal is to achieve this under any means possible allowed by the Fair Debt Collection Act. Some of the common misconceptions about collection agencies are:
1) Collectors enjoy harassing people at home and at work. Fact: Every collector on the planet would like to resolve an account with one phone call. The only reason for additional phone calls on an account are due to broken payment arrangements.
2) Collectors are unreasonable when it comes to accepting settlement offers on accounts. Fact: Creditors have already lost anywhere from 15%-50% on their bill, and as a result are much more unlikely to accept low settlement offers. As collectors are paid a small salary plus commission on the amount they collect, they are highly motivated to take any reasonable settlement and offer it to the creditor.
3) Skip tracers practice unethical business behavior. When skip tracing professional deadbeats, skip tracers on occasion might represent themselves to neighbors, coworkers etc., as a friend of the debtor to obtain pertinent contact information.
4) Collectors are hard nosed and inflexible. Fact: Due to the nature of the business, collectors are constantly under a lot of stress. Certainly they have their bad and good days as do all of us. But, they are primarily paid on commission and are very interested in resolving accounts as quickly and efficiently as possible.
It's important when dealing with a collection agency to remember that the collector you are talking to is used to broken arrangements, broken promises, and in many cases, verbal abuse. If you communicate honestly, he or she will be more than happy to resolve your account as quickly as possible to your mutual satisfaction. Tomorrow, I'll write in detail about the collection process.
Until then,
Alan
In yesterday's blog, I discussed some of the types of people collection agencies deal with on a daily basis. Now let's look at the mission statement of a collection agency and examine some of the common misconceptions about collection agencies. The mission statement of a collection agency is to recover as much money as possible on any account given to them by their clients. Their goal is to achieve this under any means possible allowed by the Fair Debt Collection Act. Some of the common misconceptions about collection agencies are:
1) Collectors enjoy harassing people at home and at work. Fact: Every collector on the planet would like to resolve an account with one phone call. The only reason for additional phone calls on an account are due to broken payment arrangements.
2) Collectors are unreasonable when it comes to accepting settlement offers on accounts. Fact: Creditors have already lost anywhere from 15%-50% on their bill, and as a result are much more unlikely to accept low settlement offers. As collectors are paid a small salary plus commission on the amount they collect, they are highly motivated to take any reasonable settlement and offer it to the creditor.
3) Skip tracers practice unethical business behavior. When skip tracing professional deadbeats, skip tracers on occasion might represent themselves to neighbors, coworkers etc., as a friend of the debtor to obtain pertinent contact information.
4) Collectors are hard nosed and inflexible. Fact: Due to the nature of the business, collectors are constantly under a lot of stress. Certainly they have their bad and good days as do all of us. But, they are primarily paid on commission and are very interested in resolving accounts as quickly and efficiently as possible.
It's important when dealing with a collection agency to remember that the collector you are talking to is used to broken arrangements, broken promises, and in many cases, verbal abuse. If you communicate honestly, he or she will be more than happy to resolve your account as quickly as possible to your mutual satisfaction. Tomorrow, I'll write in detail about the collection process.
Until then,
Alan
Subscribe to:
Posts (Atom)
