By negotiating, both parties can reduce the risk of a purely negative outcome – you can get them to accept less, and they can make sure they don’t get nothing. You must see that both sides can benefit, because you will be requiring the creditor to give up claims it does not want to give up in order to get what you offer.
To increase your perspective, let’s briefly consider what could happen to a debt collector if it makes the wrong decision or tries to proceed against someone committed to keep them from collecting:
First, they could spend a lot of time and money making telephone calls and sending letters to you. During this time - and at all times prior to the collection of the debt - they are earning nothing on whatever they spent to obtain the debt.
Next, they could hire a lawyer, which requires time and money, and bring suit, which involves more time and money.
You will defend yourself, and using the materials available at Your Legal Leg Up you will have an excellent chance of actually winning; against a debt buyer, you will probably win. At a minimum you will add another year or so to the time they must wait for any result.
Let's say they win - although, again, this is far from given. At this point they can begin to try to look for your assets. They can hire a law firm or investigator to try to find your job, or they can spend money trying to find your bank accounts. You can change bank accounts fairly easily; some people can change jobs. In any event, there are many exemptions to what debt collectors, even with a judgment, can take.
If you make enough money so that the exemptions to collection do not protect you, or if for other reasons it seems like a good idea, you can declare bankruptcy. This requires the debt collector to spend time and money filing a claim, and in effect it wipes out the judgment against you and adds another year or more to the time before they collect anything. If they collect at all, it will be a very small fraction of what they wanted to get in the first place. With foresight, you can set things up so the bankruptcy does not take very much from you.
This process is not without costs to you in time, money and worry, of course, and there are reasons bankruptcy might not be a good decision, but you should be able to see that if you will stand up and fight you can create a major problem for anybody who would try to fight you and take your money. By following the process we outline, you would likely make the collector wait for three years to collect anything, and only be able to collect it after paying lawyers to fight for it in two completely different court systems. At the end of that process, if they stick it through to the end, they might come out with ten cents or less per dollar they sought.
Click here for a little closer look at the way a debt collector's “bean counters” would see it. look a little more closely at the risk and value. A creditor/debt collector’s main interest is in money. It is, after all, running a business, and its profits and viability depend on it. As obvious as that may be, we repeat it because it means that debt collection for businesses is ultimately a very practical enterprise – it is not personal. Debt is very personal to the person in debt, on the other hand, so it can be easy to forget how impersonal it is for the other side. As much as possible, everything you do should send a message to the collector that suing you would be hard, time consuming, expensive, and pointless.