Credit Defense please answer ?

Discussion in 'Credit Talk' started by godaddyo, May 3, 2001.

  1. godaddyo

    godaddyo Well-Known Member

    On one of my other threads we had discussed the amount of the debt being the key in wether a ca or creditor might be willing to negotiate a rating or a deletion from the bureaus. Where do you believe the drop off point to be for most collectors for negotiations to occur. I do realize that it depends on how desperate they are and what time of year it is, but what is worth their time. I understand that there is no answer written in stone, Im just looking for an educated opinion.

    "live long and prosper'
  2. CYA

    CYA Well-Known Member

    bump, very curious
  3. Crdt Dfnse

    Crdt Dfnse Well-Known Member

    Foremost itâ??s important to distinguish between types of collection situations, as the basis for determining an answer to your concern. For the sake of our dealings here, Iâ??ve clearly over-simplified the following; please take that into consideration. Not that I aim to treat you (or anyone else) like a simpleton, mind you, only that the issues are somewhat complex. So Iâ??ll focus only on the root basics, given the limitations of web posts and the potential to misunderstand them.

    For background, there are four (4) types of debt-handling categories: 1) original, 2) assigned agent, 3) acquisition, and 4) legal. Whether or not and how much the other side will negotiate starts with one or a combination of these, correlated to the debt size in proportion to profit potentials.

    For instanceâ?¦

    An acquisition creditor (one whom â??buysâ? non-performing debt at a discount, and is considered a collector under FDCPA) has the greatest amount of control, based on the purchase amount. Since the creditor has bought the debt for a fraction of the original amount, thereâ??s more room to wheel & deal and still allow for a reasonable profit. This applies to credit redresses as well, depending on the companyâ??s P&Ps (Policies & Procedures) regarding discounts and ancillary offers.

    In contrast an original creditor has far more at stake, and will seek to hold the greatest amount of profit; and may be in a tighter position to deal. Likewise a debt in the legal environment will have certain costs and parameters to account for, often reflecting the level of negotiations considered. While an assigned agent (one whom represents the original creditorâ??s interest, but does not own the debt), cannot bargain too heavily without the original creditorâ??s consent.

    Secondly, there are two (2) types of recovery organizations: Large and small. Large firms are measured not by the size of debt they control, but number of employees (naturally correlating somewhat to portfolio size). A large firm could be considered one with 50 or more full-time collectors on staff, while small companies less; yet smaller concerns encompass the greater number by bulk. (There are thousands of small, â??mom & popâ? collection/servicing organizations that far out-number larger concerns.)

    Determining an estimation of negotiation levels entails a combination of category and organization factors. A â??mom & popâ? acquisition creditor, for example, should be more prone to consider negotiating a $500 dental bill. Large firms have more overhead and bureaucracy; consequently these arenâ??t likely to consider the same terms on a similar obligation.

    Now as youâ??ve aptly pointed out there are no hard & fast rules per se governing negotiations, but the general foundations (above) are the basis for considering when to negotiate and for what terms. So you see how much a recovery entity will deal depends on the category/organization factor; juxtaposed to amount, aging and nature of the subject debt(s).

    Whatâ??s a collectorâ??s time worth, you asked? Plenty! But that doesnâ??t mean a deal canâ??t be approached. If one takes the time to consider the foregoing elements, before opening the negotiation door, better results (for both sides) are far more often than not achieved. In short, unfortunately there is no magic one-step formula or â??drop off pointâ? for establishing a negotiation basis.

    Negotiating Tips:
    • Aim for WIN/WIN terms; whatâ??s good for them is good for you
    • Establish an end objective, goal
    • Institute your bottom-line terms (not for disclosure)
    • Present a â??business-likeâ? demeanor; friendly but to the point
    • Maintain your cool; stay calm as possible
    • Extend respect in the face of disrespect
    • Ask questions
    • Listen actively; voice tone, inflections, pauses and nuances
    • Interject (light) humor in tense moments, if possible
    • Propose terms in hypothetical forms; what ifs, â??â?¦suppose weâ?¦â?
    • Avoid forcing any issue; approach differently if resisted
    • Persevere without being pushy
    • Demand without being demanding; suggest consequences
  4. godaddyo

    godaddyo Well-Known Member

    Good tips and insight and as always helpful.



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