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Paying Debt and Collection Agencies

dyad

TRIBE Member
Hi!

Now before everyone starts posting their prepared rant at me for being a deadbeat: I have every interest in paying back my debt I dont even believe in the whole make an offer to pay back less than you owe thing. If I had 10 grand I would pay off my debt in full. The thing is I dont

To make a long story short I ran into some financial trouble when I found myself unemployed and had a hard time finding any job (and I was applying for everything from retail to writing) I got by with a contract tech writing job but that covered bills and rent and food essentially. My credit card slipped to R9 and both my student loans went to collection.

I have never avoided calls and have been making regular payments since I finally started working full time again. Between the three I have been making 450/month in payments since August

In October I was rejected by the bank for a consolidation loan. Now that my current set of cheques have finished the collection agency is encouaging me (hahaha) to find a way to take care of the balance for the canada student loan. They have my work number so I usually just act as pleasant as possible so they dont try to upset me in my workplace.

the student loan with them is currently sitting at 5,828.40 and they are charging 8.25 % interest. They are suggesting I go with one of the High Risk Loan places to get them to take it over so that they can charge me 26% but will bring that loan down to R1. He was saying in 6 months i can just get the bank to take it over (but dont tell them that when i call) which I think is super shady.

My questions are: Am I better off staying with the collections agency at the lower rate and continuing to try and get a bank loan to consolidate my debts? Is there a way that I can articulate this to the collector without causing him to try and intimidate me at work (I cry super easy and dont want to be unprofessional) and can I lie to him about applying for the loan and getting rejected or will he be able to know that I didnt really apply?
 

Ditto Much

TRIBE Member
dyad said:
I have never avoided calls and have been making regular payments since I finally started working full time again. Between the three I have been making 450/month in payments since August

....

My questions are: Am I better off staying with the collections agency at the lower rate and continuing to try and get a bank loan to consolidate my debts? Is there a way that I can articulate this to the collector without causing him to try and intimidate me at work (I cry super easy and dont want to be unprofessional) and can I lie to him about applying for the loan and getting rejected or will he be able to know that I didnt really apply?

Keep it EXACTLY the way that it is!!! You have clearly shown intent to pay, that you are paying on a consistant basis and that you have assumed responsibility for the debts. Switching to the high risk %26 loan is how the credit agent gets his bonus, he gets a chunk of cash knowing full well no bank will ever take it over.

Your doing the right thing stay the coarse and have a regular chat with your bank. If you can get them to help get them to help but don't even think of trading %8 for %26 or I'll come over and slap you!!!
 

kuba

TRIBE Member
IO agree with ditto. He'll basically drive over from dakota and slap you. Or he can send me. I can slap you, too.

Seriously, it sounds shady. Why are they still calling you? Can't they see you are making regular calls? Can you possibly get anyone to co-sign or to get a LOC for you, and then you use that to pay it off?

Although 8.25% isn't too bad, especially for someone with an R9.
 

dyad

TRIBE Member
Thanks. I figured it seemed a little too shifty to be in my interest in any way.

Now to work up the cojones to call back and stay calm and pleasant with the agent. I know they are totally allowed (and supposed) to swear and yell and threaten and Im not so good with that kind of conflict.

I should call my mom tonight and ask again for co-sign. When this process started she was hesitant to believe I could make consistent payments and didnt want to be on the hook, but maybe with my months of responsible payments she might be easier convinced
 

supakeli

TRIBE Member
dayd,
you don't have to put up with their abuse. You are making your payments to the best of your ability and keeping them imformed. Don't let them intimidate you.

Simply state the date you will make your next payment and if they give you any guff, just reiterate when your next payment will be made, thank them for their time and gently put down the phone.

They've already done their worst, no need to let them upset you anymore.
 
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Ditto Much

TRIBE Member
If you owe 10,000 at %8.25 your paying 825 in interest per year (actually its closer to 900 but thats a whole other issue) this means that every month your paying $75 in interest. Assuming that your paying 450 /month this leaves 375 for principle and you should be paid off in about 2 years.

If you switch this to a %26 you'll be paying 2600 in interest per year (actuallys its closer to 3000) which means every month you'll be paying $220 in interest. Assuming the same 450 /month this leaves 230 for principle and you will pay off the debt in about 4 years.

Its a sucker bet
 

Boo

TRIBE Member
Ditto Much said:
Your doing the right thing stay the coarse and have a regular chat with your bank. If you can get them to help get them to help but don't even think of trading %8 for %26 or I'll come over and slap you!!!
Totally, these collection agencies are prepared to accept a settlement on the outstanding amount of less than 80% when it gets to them, the fact you want to pay 100% is more than enough, they just want the money up front rather than risky payments.

I have sucessfully negotiated up front settlement discounts of between 35-50% on the PRINCIPLE (ie they waived all accrued interest). Your R9 isn't going to go to a R1 any time soon if its gone to a collection agency. I'd do a credit report check and if the agency appears on your file, then you've really got very little to gain by agreeing to their terms, as that puppy will be on there for 6 years as will the initial defaulted loan.

A 'possibility' (and what I did) was to avoid all the creditors, I moved (not because of them) changed my number etc. Took my own time to save up a lump sum and tell offer to pay $3 grand of that 5k in one lump sum to clear the debt - and will a little persistance, the debt will be clear. To them 3k now is better than a promise to pay $5k in instalments over the next couple years, but don't pay 26% interest to do it.

PS you gave them your work number? I think you can request that they do not call you at work, and say that personal call are not allowed and they legally must comply. I made all phone calls from a payphone and never gave out my number
 

kuba

TRIBE Member
dyad- why are they allowed to threaten you EVEN THOUGH you are making payments?

are you saying that they can continue to threaten you even though you're holding up your end of the bargain?

can't you give them a void cheque and sign something that will let them take a certian amount per month from your accoutn OR do you make payments on your own schedule? (i.e. not always the same day per month)
 

DEEPHOUSEGRL

TRIBE Member
26% interest is extortion IMO. Maybe your parents might be able to help you out by paying off the student loan, and hopefully you can do a payment plan with them. NO interest (on student loan debt) would be helpful, in order to pay back your credit card debt faster. I totally understand your situation/ frustration- good luck!
 

Ditto Much

TRIBE Member
dyad said:
I could make consistent payments and didnt want to be on the hook, but maybe with my months of responsible payments she might be easier convinced


Start each phone call with

"For legal reasons I'm required to record this phone call, please state your full legal name and the full legal name of the company you work for"

make a click sound by tapping a pencil or pen against the microphone. Now if they threaten you or start swearing remind them that this call is being recorded and that you are not going to allow them to talk to you like this, if they do it again tell them that the conversation has ended and hangup.
 
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dyad

TRIBE Member
Ditto: the 8% is on my student loan part of my debt... the credit card (which is about 2 grand) is much higher.

I never gave them my number but because Im naive when it comes to these things told them where I worked because they said they just needed it for their records. I have already asked that they not call me here and they started freaking out on the phone telling me I wasnt in a position to dictate terms.

Kuba: my only worries about a void cheque is all the stories Ive heard of gyms and stuff with preauthorized payments being able to change the amount for withdrawal without your permission. I dont know if its true or not but its definitely something I should consider
 

ScottBentley

TRIBE Member
I would suggest calling both of your student loans cust service #'s and ask them to recall your loans from collections, this way you will be paying a lower interest rate and if you ever find yourself in financial difficulty again they have repayment programs they can offer (Interest Relief is the best...you get 6 months where no payments required with no interest accumulation). I used to work in customer service for student loans and this is a very common practise...they make more money if the loan is kept in house.

Good Luck!
 

Ditto Much

TRIBE Member
kuba said:
dyad- why are they allowed to threaten you EVEN THOUGH you are making payments?

are you saying that they can continue to threaten you even though you're holding up your end of the bargain?

Its a scam!


What they are trying to do is get himn to get a loan which they know no bank will ever give him. So they will suggest a private lending institution (they're own company) that will give them the loan. The collection agent will likely get about 1/4 of the interest payment as a bonus for getting you to sign the deal. So the agent is trying to cold sell a bad loan knowing that when you don't pay it he gets it back again and starts all over.

This is basically a legal way to fuck you violently and they will lie and cheat and scream and yell to intimidate you into doing it. They know the call will never get played in a court so they are going to break every single rule in the book to get more money. Likely they bought your debt for 30 cents on the dollar.
 

quantumize

TRIBE Member
this sounds totally unporofessional on the part of the debt collection agency. I dont know what you should do but I know you shouldn't be treated like this.
 

Prickly Pete

TRIBE Member
Hold on to 8.25%... its a good rate right now... I just went to see if I could get a better one than the 7.75% I am paying and I was told the best rate (BMO) I could get was 9+%...

edit: also it took me about 3 years of making payments (with no bad credit) to get the bank to consolidate... they aren't going to do if for you in a few months...
 
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judge wopner

TRIBE Member
collection agencies:

their mandate is to collect fully payment,
when i worked with one the 1st question you ask is:
"when i can expect full payment"

the agency wants their money asap, hence the reason they have a mathematical way of figuring out settlement amounts, accounting for your special circumstances and how reasonable it is that you will pay.

i wouldnt change your set up either.

you may get an R1 but the outstanding debt load from a high-risk type agency will set off alarm bells to any credit analyst worth his salt if considering you for loans and the like.

if you are upholding your promise to pay schedule that they accepted, then inform them in writting that you do not want to be called at work, legally they wont be able to do so any more,
if you find them threatening, include this in your letter adn indicate you will place a complaint with the provincial body of collection agents ( i cant remember their name) trust me they dont want these complaints.

that will calm them down.

good luck,
 

Boo

TRIBE Member
Ditto Much said:
Likely they bought your debt for 30 cents on the dollar.
I wouldn't even say its that high, but every buck they get over this is just gravy to them.

PS I would say dyad is a girl - they 'cries very easily' part was my first signal :)
 

Ditto Much

TRIBE Member
quantumize said:
this sounds totally unporofessional on the part of the debt collection agency. I dont know what you should do but I know you shouldn't be treated like this.

People in debt don't go to court.


They know full well that nobody will ever take them to court so they will break every law in the book. Collection agents know that you owe money and you aren't going to be able to hire a lawyer or for that matter take them to court and win so they have nothing to lose.

I lived above a collection agency for over a year and its funny to see them work. They will litterally act like they can send police over to your house to scare and intimidate its the nature of the business.
 

annec

TRIBE Member
Ditto Much said:
If you owe 10,000 at %8.25 your paying 825 in interest per year (actually its closer to 900 but thats a whole other issue) this means that every month your paying $75 in interest. Assuming that your paying 450 /month this leaves 375 for principle and you should be paid off in about 2 years.

If you switch this to a %26 you'll be paying 2600 in interest per year (actuallys its closer to 3000) which means every month you'll be paying $220 in interest. Assuming the same 450 /month this leaves 230 for principle and you will pay off the debt in about 4 years.

Its a sucker bet
Let's get fiscal!
 
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dyad

TRIBE Member
Boo: maybe im just a sensitive man :D yes I am a girl

I should start writing letters though... keeping a provable record is never a bad idea.

Does the NSLC really take back accounts? that would be ideal as I could set up automatic withdrawl with them. I wouldnt be applying for interest relief (again I do want to make my payments) plus I think I make just a little too much to qualify
 

ScottBentley

TRIBE Member
dyad said:
Boo: maybe im just a sensitive man :D yes I am a girl

I should start writing letters though... keeping a provable record is never a bad idea.

Does the NSLC really take back accounts? that would be ideal as I could set up automatic withdrawl with them. I wouldnt be applying for interest relief (again I do want to make my payments) plus I think I make just a little too much to qualify

definately! htey may ask you to provide recent paystubs to prove that you are currently employed but it is possible...also ask about the Principle Deferment program (if recalled)...for 6 months you would make "interest only" payments on your loan and allow you to catch up a bit on your other debt.
 

Richard Raiban

TRIBE Member
you would be surprised at the lengths collection agencies go to to obtain contact information. they are/can be very ruthless there is no doubt regardless if you are already on a monthly payment plan. they will always continue to call to try & get the payment made in full or negotiate a settlement amount.

the reality is you do owe the debt so if you CAN get financial support from family/relatives pay it off right away and pay the amount in full. it will look a lot better on your credit rating vs. a settlement amount and/or monthly payments. but like others have said, any contribution is better than no contribution
 

litespeed

Well-Known TRIBEr
dyad said:
Hi!

Now before everyone starts posting their prepared rant at me for being a deadbeat: I have every interest in paying back my debt I dont even believe in the whole make an offer to pay back less than you owe thing. If I had 10 grand I would pay off my debt in full. The thing is I dont

To make a long story short I ran into some financial trouble when I found myself unemployed and had a hard time finding any job (and I was applying for everything from retail to writing) I got by with a contract tech writing job but that covered bills and rent and food essentially. My credit card slipped to R9 and both my student loans went to collection.

I have never avoided calls and have been making regular payments since I finally started working full time again. Between the three I have been making 450/month in payments since August

In October I was rejected by the bank for a consolidation loan. Now that my current set of cheques have finished the collection agency is encouaging me (hahaha) to find a way to take care of the balance for the canada student loan. They have my work number so I usually just act as pleasant as possible so they dont try to upset me in my workplace.

the student loan with them is currently sitting at 5,828.40 and they are charging 8.25 % interest. They are suggesting I go with one of the High Risk Loan places to get them to take it over so that they can charge me 26% but will bring that loan down to R1. He was saying in 6 months i can just get the bank to take it over (but dont tell them that when i call) which I think is super shady.

My questions are: Am I better off staying with the collections agency at the lower rate and continuing to try and get a bank loan to consolidate my debts? Is there a way that I can articulate this to the collector without causing him to try and intimidate me at work (I cry super easy and dont want to be unprofessional) and can I lie to him about applying for the loan and getting rejected or will he be able to know that I didnt really apply?



I love threads like this! :D

First off... you have collection items... no bank will give you a loan, UNLESS you can get some one to help with co-signing AND they go down as the primary.. that's probably your only chance.


Now as for the collection agency.. don't listen to what anyone else tells you.. just do this..

Send them a fax requesting that all further correspondence be through writing. cc: the fax to the Ministry of Guvernment Services (formerly the Ministry of Consumer and Business Services). By law they are not allowed to contact you by phone if you request them to do so.. problem is they only really obey this if you send it in writing.. and cc: it to the ministry is good because they are the ones actually responsible for licensing the agencies.

once you've done that... complete this http://www.cbs.gov.on.ca/compform/english/complaint.asp
this is an online complaint form on the ministries site. Be sure to tell them everything that happened.. say also that you requested that they not contact you and they continued to do so... tell them that they tried to get you to take a loan from a high risk lender to pay the student loans out.. mention the interest rates.. mention that you've been paying such and such amount of money for 6 months.. say that the agency refused more payments.. and be sure to mention the collectors name in the complaint.

Once you've done these two things... send the collection agency more cheques.

with student loans.. specifically any portion that was garaunteed and paid by the federal Government, the collection agencies are not allowed to refuse payments.. that's an hrdc rule who are the ones that deal with the federal garaunteed portions and the agencies
 
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