If you have debt troubles at all, you’re probably going to be getting calls from debt collectors. Should you answer them and speak to the debt collectors? If so, what should you say? Usually you should not say anything at all, but if you have something you need to say, say it and then hang up.
Most of the Time, Silence Is Golden
Most of the time you should not be talking to debt collectors unless you have a specific, well-defined reason to do so. Otherwise, you can end up making their life a lot easier – and yours a lot harder.
There is almost no reason to talk to a debt collector. If you HAVE all the money they want, and you want to pay it, then it would make sense to negotiate. If you think you have enough to make a deal, you might also negotiate, but you should remember not to admit anything. YOU CAN ALWAYS NEGOTIATE A SETTLEMENT WITHOUT ADMITTING THAT YOU OWE THE MONEY. People ask me that all the time – and yet everybody knows that companies settle lawsuits all the time without admitting they did anything wrong. You can do it because the assertion of a claim, or the threat (or existence) of a lawsuit is a threat. You settle to make that threat go away.
If you don’t have enough money to make a deal for at least 70% of the debt, it’s usually a bad idea to attempt to negotiate beyond a very preliminary stage. The person you’re talking to doesn’t have authority to make such a deal. So you can say you might pay 10% of the debt, but it would make no sense in attempting to negotiate beyond that. You will need to talk to someone higher in authority. You could ask to speak to that person.
Beyond that, anything you say will likely just be wasting your energy and time and may lead to other trouble. Remember that your dispute, in order to force verification, needs to be in writing, so you can tell the debt collector you dispute the debt but don’t forget the dispute letter.
Like my article on requests for documents, this is going to be a brief article. For a fuller discussion and samples, look in the Debt Defense System. Still, you should be able to create your own after reading this.
As with other discovery, Requests for Admissions are controlled by the rules of civil procedure for your jurisdiction. And there are two sets of rules you must consider: your state rules in general and, if you are in some sub-court of the state, the rules regarding your court; and your “Local Rules” if your court has them.
An example of what I mean by “sub-court” might be what we have in Missouri, Associate Circuit courts – courts that are designed to handle smaller amounts of money, or small claims courts (even less money). Many states have similar types of arrangements, and these sub-courts will have their own special rules, and these rules always control when and how much discovery you can conduct.
Even if you’re not in that sort of sub-court, your court may have “local rules,” which are rules designed to elaborate on your state’s rules of civil procedure. The rules of civil procedure will create the general structure of discovery and set the penalties for not cooperating – the local rules will establish certain limits: only a certain number, for example, or that they must be in a certain format (not “compound,” usually, meaning without sub-parts).
Whatever the situation, you must find the rules controlling your discovery, or you may do something wrong, giving the debt collector an easy out. To find your rules of civil procedure, follow this link. Any special rules may be mentioned in your rules of civil procedure or in your court’s web-page. I am not aware of these rules – but you must be.
What Admissions Are
I have done my best to warn you throughout this series, in my Debt Trouble series, and elsewhere, about the risks of admissions. Whereas requests for admissions are covered in the rules of discovery, they really are not discovery: they are a sort of agreement that certain issues do not need to be argued about. You aren’t seeking information or evidence, you are asking the other side not to dispute the issue – to make evidence unnecessary. That means that while you can argue about what documents or interrogatory answers mean and whether they “establish” any fact, once an admission is made, the issue is resolved and decided. When it comes to answering their requests for admissions, that means you should be very, very cautious. One reason I encourage people to send out discovery first is that I want you to see how they handle yours before you try to answer theirs.
If you have unlimited requests for admissions, you should make sure, at least, to ask them to admit to no knowledge or information regarding each part of their petition. For example, if their first allegation is that you owe them money, you ask them to admit that you do not. And then you ask them to admit they have no evidence that you do. (That’s two separate requests, because requests for admissions must never be “compound” – they can’t have more than one part.)
Special Warning Regarding Requests for Admissions
It should be obvious from the above that requests for admissions are basically just traps for suckers. They will deny or object to every single request you make on any basis, however flimsy. If your rules limit your total discovery to a certain number of requests and include requests for admissions in that number (so that for every request for admission, you lose an interrogatory), I suggest you skip the requests for admissions altogether. On the other hand, many jurisdictions do not limit them this way. The reason you use requests for admissions is that you want to have the materials you need for a motion for summary judgment even if they don’t respond to your discovery at all.
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Never Make a Partial Payment
For a free copy of this article in pdf form, click here: Never Make a Partial Payment
Suppose you get called by a debt collector about a debt that you might want to pay. That is, you think it’s legitimate, you think the company calling you may be legitimate (subject, always, to proof!), and for other reasons you’re inclined to pay. But you don’t have enough money. “Not a problem!” says the debt collector. “You owe us $2,500, but why don’t you just make a payment of $75 tonight? Then you can pay the rest whenever you can afford it.”
Should you do it?
What you should do
This is a made-up situation, of course, but some variation of it occurs many times every day all over the country. The collector is either nice, and you want to help him out by chipping in “just a little” to help his statistics, or the debt collector is mean, and you think that making a payment will be the fastest way to get her off the line.
Of course you know they’re paid to make you feel the way you do, but that doesn’t really matter. There are times when the way you feel trumps whatever you know – and the debt collectors are paid to know about that, too.
The question is, should you make that little payment?
To Pay or Not to Pay
The question you need to answer first is NOT whether you want to pay. The first question you must ask yourself is whether you can see exactly how you will be able to pay – and not just the payment you’re being asked to make, but all the rest of it. The debt is $2,500. Can you see how you would pay all of that? Can you think of terms that would actually work – as you can see at the moment and without hoping for something surprising and unusual happening?
To be frank, most people being contacted by a debt collector on a bill they thought they should pay can’t see a way to pay it. If that’s you, you should not pay any part of it.
If you can see a way to pay the debt and believe you should, and if the debt collector will agree – in writing – to the terms you think are necessary, THEN you can ask whether you think it’s the right thing for you to do. Often people may conclude it is, for a variety of reasons, and if this is you, then make the deal and whatever payments you agree to. We’re not here to tell you not to pay legitimate debts – only to make sure the debt collectors don’t crucify you.
Why Should You Act as we Suggest?
You should ask the questions in the way we suggest, and act according to the answers you come up with because making a payment is not a legally neutral act. It has major legal consequences.
Making Payment CAN Admit the Debt
We tell people all the time that one of the biggest difficulties debt collectors have is establishing by legitimate evidence that you owe them the debt. Can you see how making a payment seems like admitting you do? The debt collectors will argue that it is an admission, and some courts will buy that argument. Your argument that you only made the payment to make the debt collector feel better or to get them off the phone will cut no legal mustard because that is not a rational thing to do. The courts will hold you to a standard of reasonability, often, that ignores either your compassion or fear or desire for peace and quiet. Paying someone you don’t owe isn’t rational, and there’s a good chance the court will view your payment as admitting you do owe.
Making Payments WILL Restart the Statute of Limitations
One thing most courts agree is that making any payment at all will restart the statute of limitations. That is, if the debt is four years old and the statute of limitations is set to run out next month, your payment of any amount will give them four more years to harass and possibly sue you. And the fact that you paid them will almost guarantee that they’ll use the opportunity since they know you’ll roll over.
I have argued that making a partial payment that does not “cure the breach” (isn’t enough to say you haven’t broken the contract) should not restart the statute of limitations because the breach still dates back to the time you failed to make payment. I think that makes sense, but as far as I know, no court has ever agreed. Every decision I’ve seen on the issue has held that any payment starts the clock running from the very beginning again.
And this is a large part of why debt collectors are so eager to get you to make a payment. It’s also why I emphasize that in asking whether you can afford to pay, I refer to the entire debt. Making a partial payment is a commitment to paying the whole thing whether you mean it that way or not.
Never Make a Partial Payment
All the above factors suggest that, for almost every person being contacted by a debt collector, making a partial payment is a terrible idea. If you are that rare “other person” and can afford to pay the whole thing – and want to – then it’s fine if you do. Most people should steer far clear of the temptation. You can hang up on an angry caller and even make them stop calling. And the nice caller will find her victim somewhere else. Don’t let it be you.