Can’t Pay Creditors? Here’s How To Deal With Debt Calls



If you are ever in the position of seeing your debts turn sour, it can be an incredibly scary experience. Not only are you worried about how you are going to pay the bills, but every time the phone rings, you will be on tenterhooks. The pictures you have in your mind of big, imposing debt collectors coming to your home and taking away your possessions start to become all too real.


However, don’t forget that just because you owe money, it doesn’t make you a criminal. And you still have rights, no matter how often the phone goes or letters come flying through your door. The trick is to be brave, be honest, and be available – and you will find that really gives you a tiny fraction of the fear you get from your imagination.


With all this in mind, here’s a little guide on how to deal with debt calls and creditors when they are chasing you for money. It’s never going to be a pleasurable experience, but these tips will help make it as positive as it can be. Let’s get started with the absolute basics.


Know your numbers


The first thing to understand is that to speak with creditors, you have to know your figures. Make a budget, and determine exactly how much you can afford to pay off. It’s also important to pay off your most expensive debts first so you may have to explain to some of your creditors that you simply can’t afford it right now. Ultimately, however, without a robust and accurate budget in place, it can make your initial contact with a creditor a big challenge. They know all the little tricks of the trade and may encourage you to sign up to a repayment schedule that you can’t afford.


Understand what might happen


You should also do some research on what can actually happen when you owe money. Legal action is possible, of course, but creditors have to take a very specific course of action. The process usually starts with acceleration. This is the point where you fail to pay your bills and miss a payment, and at this stage, you will usually start getting phone calls, letters, and angry emails. Some creditors will even make the entire debt payable, and if you don’t, a court could force you to give up your property. This stage is called repossession and involves the creditor seizing your property as collateral for the debt. If you don’t pay, they get to sell it – and you will still need to pay the difference. You also might be forced into a wage garnishment. Courts can order your employer to divert funds from your salary and pay them directly. Finally, if you fail to pay your mortgage for some months, you might have to go through foreclosure – where the lender can force you to sell your home.



Call them before they call you.


Another thing to remember is that creditors are usually a lot angrier when they feel you are trying to avoid them. So, if you are in financial difficulty and genuinely can’t pay your bills, make the first move. As point out, the reality is that when you go into debt, lenders will try and help you as much as possible, simply because they want to get their money. You will need to be pretty straight with your lenders, however, and they will want to know a few things. First of all, they need to know why you can’t pay. You can expect to tell them about your income situation now and in the future, too. You should also mention your other financial obligations, and explain how you are planning to bring the debt back up to date. In many cases, you’ll find that the vast majority of creditors will be happy enough, as long as you stick to your end of the bargain.


Plan your sentences


It’s important to establish what you are going to say before making – or answering – a phone call. Write it down if necessary, too, to ensure you stick with your story throughout the conversation. While debt collectors have to comply with pretty strict rules, some will try and trip you up – having a note in front of you will keep you on track. However, whatever you do, don’t make stuff up. Regardless of whether you write it down or not, it’s a lot easier to make mistakes when you are lying, and there’s every chance you will change details of your story that will eventually catch you out.


Write down responses


Don’t just write down your own script. Some debt collectors will have a nasty side, and could even start threatening you with court action or a removal of your possessions. It’s important to write all these details down, as in the vast majority of cases they will be illegal. You can guarantee that the creditor will be recording your call, and could use it as evidence against you – make sure you are doing the same to them. Be calm, ask for specifics, and don’t crumble under any threatening behavior.


Keep your cool


While we are on the subject of remaining calm, try to avoid losing your temper. It can be tough, of course, especially when you feel you are under pressure. And some debt collectors know exactly how to push the right buttons and know they will benefit when things get emotional. Keep your cool, and no matter what the other person says, don’t forget that this is nothing personal. If you don’t like the tone of their voice or feel they are threatening you, just calmly express your desire to record the conversation. In the vast majority of cases, this will be enough to shut anyone up and ensure they are on their very best behavior.



Offer a schedule you can afford


We touched on this earlier, but it’s worth exploring in greater depth. A good idea for offering a repayment schedule is to write down what you owe in the form of a ‘problem and solution’ script. You have to remember that the people who you are talking to you on the phone cannot read your mind. So, make it clear to them. Summarize the problem in brief, and make sure you keep things relevant. The creditor won’t be interested in your sob stories but will appreciate your position if you have been laid off without warning. It’s also important to suggest very specific solutions – what are you going to do to get back on track? This should form part of your solution, and in many cases, a creditor will be impressed you are already working to find an answer. So, while you might not be able to pay the $200 a month they are asking, suggest what you can afford – don’t leave it up to them to decide.


Deliver on your promises


Unless you want the phone ringing off the hook again, you have to stick to your promises. This includes the payment schedule, of course, but it also means sending in proof, a letter, or any photocopies of documents that you have been asked for. Again, write down everything that is asked of you and ensure that you understand your part of the bargain. Be organized, too, and make sure that you note down all important repayment dates to make sure you don’t miss them. According to, this part of the process is incredibly important, and if you want to keep your credit score in good shape, you have to pull your weight from now on.


Striking a deal


One final point to remember – if the debt is old, you might be able to persuade them to give you a settlement. A settlement is when both parties agree on a percentage of the fee that effectively cancels the debt. There are no guarantees you will get one, of course, and it’s also worth considering that a payment like this will be reported on your credit report. However, for large loans that seem impossible to pay off, it might be your only option. The trick is to make sure your creditors know it’s your only option, as making it clear they can either settle for a percentage or end up with nothing. Settlements won’t be offered by the original creditor before you have failed to pay your bills for 90 days or more. Not only can you request a reduction, but you can also make sure that you can afford monthly payments that are actually manageable. If you are looking for a settlement from a debt collector, it can sometimes be possible to get an even more in-depth reduction. When debt firms buy debts from lenders, it’s usually at around 0% of the original amount. That means they can be incredibly flexible – if you get to speak to the right person. As we mentioned earlier, there are no guarantees, and settlement will show up on your credit score. But the official debt will go away, and you won’t be hassled, stressed, or upset.


Good luck – and keep calm!