Hi, I am a deadbeat. I have walked out from under thousands of dollars of debt, not filed bankruptcy, and never paid a dime of it back. Right now, I have a clear credit report. I have three prime credit cards, can qualify for a home loan, a car loan at the best rates, you name it. Here is some of what I learned along the way. First, there is no shame in being a deadbeat. The word â??deadbeatâ? is an empty insult, a word used to try to shame you into paying money you probably canâ??t afford to pay, or else thrown at you by a frustrated collector who realizes he or she wonâ??t be making any commission from you. Tough noogies for them. The odds are you are in credit trouble because of an event you could not control, like a job loss, medical issue, downturn in business, family crisis â?? whatever. It isnâ??t as if you planned on being in a mess, and you will, most probably, dig your way out given time. Unfortunately for everyone involved, collectors want their money right now, and God damn the consequences for you. If you have to live in a box, as one collector told me, they donâ??t care, â??as long as they gets their money.â? So let them insult you. It means nothing, and you probably have more important things to deal with, like paying the rent, tending to your health, finding a job, and so on. Keep your priorities in sight, and words like â??deadbeatâ? lose their magic. They can even become something of a badge of honor. Second, collectors are essentially powerless. Hang up on them. When they insult you, insult them back. Let them have it. The majority of them are, quite frankly, scum of the sort you wouldnâ??t bother scraping from the bottom of your shoe. Treat them that way. They will lie, threaten, harass, bully, whatever it takes to get your money. They arenâ??t interested in you or your problems; the only thing they want is their commission, and God damn the consequences to you. The only real power they have is if they sue and get a judgment against you, but the odds are your debt is too small to make that cost-effective, so it is, like almost everything else they say, an empty threat. Personally, I found collectors entertaining. Oh, I admit at first I was intimidated, but after trying to reason with them a few times, I realized they were stupid and brutish, and acted that way towards them in turn. And you know what? The calls stopped. Collectors are bullies at heart; once they realize you canâ??t be intimidated they will go off in search of easier prey. Time is money to them; make the time they spend with you expensive and unpleasant, and they will quickly decide to spend it elsewhere. Third, arm yourself with as much information as possible. Be prepared. Most probably, the collectors will commit several violations of your rights as a debtor â?? and yes, just because you are a deadbeat does not mean you forfeit your rights. Tape record any phone calls. Get everything in writing. Just because you are a deadbeat does not mean you are defenseless. A couple of violations can give you just the leverage you need to turn the tables on them. Something more: you have power. You see, you have something the collector desperately wants: your money. To get it, they will be nice or nasty, whatever they think will work. Iâ??ve had collectors yell, threaten bodily harm, insult my lineage, and swear at me, but Iâ??ve also had collectors earnestly tell me they wanted to help me, they were doing this for my own good, they wanted to ease my conscience, all sorts of warm fuzzy talk. But at bottom, however they act, they are all the same: they want your money, and you control whether they get any or not. If you decide to give them some, make certain that you are getting something in return. Remember that, and remember your rights, and you canâ??t go too far wrong. Finally, be aware of your own circumstances and goals. I knew that it would take me years to recover financially, so I had nothing to lose in being as aggressive as possible. Your situation might be different. You might have small debts that you will soon be able to pay off, and might have relationships with your creditors you want to preserve. Or you might be in a position where a judgment is a real possibility. If thatâ??s the case, what worked for me probably isnâ??t the path you want to take. Search through this board for posts from people who were in a position similar to yours. Read. Arm yourself with knowledge. But the basic principles remain true: you have the money (or will, eventually); they want it. You have rights and interests; they have one short term goal. Keep those dynamics in mind, whatever you decide to do. I am aware, by the way, that many of the people on this board have a different approach in dealing with collectors. For them, rule number one is to never talk to them on the phone. My own experience was that they are most vulnerable on the phone. They figure a conversation isnâ??t going to be a part of a permanent record, so they can say what they will, and deny it later. But when you have a tape, that changes. I killed one debt, a nasty chargeoff from BofA, just by goading a collector into a fit of profanity, while he was being taped. I played the tape for his supervisor over the phone, and never heard from them again. I wasnâ??t even aware of the FCRA at the time, but I knew they couldnâ??t swear at me, as this guy had made a habit of doing. People donâ??t swear in writing. So if you feel comfortable, and have a tape recorder for your phone, I say go for it. Just keep in mind that taping can work both ways, so donâ??t say anything that will incriminate yourself. Leave that for the collectors.
Hey, It's early in the morning and I'm gonna take a stab at your post ;-) I do have to agree with you about arming yourself with knowledge. That is one of the great things about this board. No matter what has happened in the past with your debts, you have a way to fix it, and if need be, learn from it in a positive manner. Before I found this board, I was terrified of being sued, and the thought of getting a letter from a lawyer frightened me to death. I do have to laugh and wince at the word 'deadbeat' being something to be proud of? ;-) LOL........... Nice post though ;-)
Nice post. I would say for the most part, every thing is correct. Because it is my job, you are correct: I am after the money. I am not a debt counselor or any type of family crisis counselor, so I am not calling our cardholders to ask them about their feelings. They could owe the bank upwards of 40, 50, 200 thousand dollars. You better believe if someone owed me that much money I would be calling them everyday. So, you are right, in the end we are calling about the money. But that isn't because of our personality, it is because it is our job. Most people forget that have an option of using a credit card or not. They BORROWED thousands of dollars from the bank. As I stated in previous posts, everyone is going to run into problems, but they should still feel obligated to pay the debt back. Well, you say, the bank is raping me with fees and interest. If you read your RICA, you would know the consequences of not paying your bill on time. If you don't agree with the RICA, then don't use the card.
Ccollector, I have to agree with you and disagree. First, you are correct, each person should read the RICA and undersrtand the responsibilities of using that card. Unfortunatley, many of us are either not financially literate or we have every intention of paying the debts back, but we have come under unfortunate circumstances. Let us not forget that we pay on average a much higher interest rate for unsecured loans compared to secured ones. The reason being that the credit card company is taking more of a risk, With that being said, they also have more to gain. We must also not forget that Americans are bombarded with millions of offers of credit each and everday. We are teased and motivated to "consolidate and lower are interest rates". The penalties for being late are high, but we have already fallen prey to the credit card rat race. Many of us are given credit lines we could never afford to pay back and when we don;t the amount owed is kicked up to an ultra high default interest rate. I have learned to keep my LOC's under watch and I only charge for accounting purposes or for appreciating assets. When you get a credit card, they do nothing but encourage the consumer to spend and charge on it. They rarely ever mention the fact (except in the RICA) that you have to pay it back. They give the illusion of spending freely with no ramifications. In retrospect, I have found that credit cards are over-rated tools that a huge majority of people in trouble. These people arent stupid, they just lack the experience of "those" who have been burned before, "LIKE ME"!!! Believe me, most of us can read and we have not problem understanding a card holder agreement. I believe that it is funny that the goverment is trying make credit card compnanies give FULL disclosure of what it will cost the consumer. We arent the only ones who think that the issuers are crooks!!! Besides, once one becomes financially educated they will find that their are better ways of securing LOC's with much better terms than credit cards..With deductable interest.... Regards,
Fine and dandy for you to get away with not paying what you owe, obviously we, the ones that pay, are paying for you and all the others that skirt their responsilities. www.creditsense.com
Ccollector, There are various ways to secure LOC's that can be used for different purposes. What is it that you want to finance??? This helps in determining the best LOC for you... Deductable interest occurs when you are using credit for the proper reasons, for instance a home loan is a good example..
I don't think alot of people advocate not paying legitimate debts, but, the nature of the business is, YOU KNOW GOING INTO THIS, THAT A CERTAIN NUMBER OF ACCOUNTS WILL DEFAULT. THAT'S THE RISK YOU TAKE. IF YOU DON'T LIKE IT, GET INTO ANOTHER LINE OF WORK.
Well, I live with my parents... I have three credit cards, a retail card, a car installment loan, and an engagement installment loan. I walked into a bank about a month ago and asked for a $3,000 unsecured loan to pay off my credit cards (2.9% until 12/02, 5.75% fixed, and 14.65% fixed) but they told me even with perfect credit my interest rate would be higher than 13% for an unsecured loan.
CCollector, You're problem with getting a unsecired loan with a reasonable rate is 2 fold. You have a very limited credit history and, you just don't have the income to support a bank loan. Bankers aren't receptive to a 19 year old working 30 hours a week and a full time student receiving a unsecured loan for consolidation purposes. People who fit this profile carry a higher risk. Pay those bills off and get a fulltime job before you try the unsecured loan approach.
Ccollector, If you have been using your credit lines, you realize that you recieve teaser rates in the mail on a regular basis. Many people use those over and over agian to keep there interest low. Unfortunately, most banks will charge outrageous rates to customers for unsecured credit lines. Your local bank wants to make maximuim profit off of their holdings. If you have great credit, you may want to try a credit union. You will probably only get a rate of 9-10%, which is pretty standard. As a said in an earlier post, I use LOC's for appreciating assets, not for consumer debt. This affords many opprutunities to myself that arent avialibale to others. Even if I fall under hard times and need an LOC for consumer debt, I have a relationship with my banks Commercial Lending departement that will give me a $100,000 dollar credit line at a drop of a hat. I am not a rich guy, yet i have a relationship with my bank that allows me the freedom to use an LOC for investing purposes. BTW, you realize that getting a 2.9% rate on a non-secured installment loan is unheard of, unless you have a really special relationship. Regards,
jrjr35, You only have part of the story. Yes, a percentage of accounts will default but, studies show if you lean hard enough on the ones who default, you'll get some portion of the money repaid. The problem is, you can't positively ID who you can get money out of so, you try and aggressively collect all of them. You just can't separate the granting of credit with the collection end of the business. If you just let defaulted accounts slide, default rates go higher and players leave the business just as you suggest. Nextcard is done, Metris is on one lung and a prayer and Providian ain't looking that good. If these players leave, do you really think Citi and MBNA are going to make a mad rush to capture market share in the subprime community? Losses get out of hand and a good banker will leave the industry and deploy assets elsewhere with less risk. Anyone want to try and find financing for an internet or telecommunications startup? Bottom line, lenders expect to be paid to service a market.
There are many reasons for going BK, some are legit, but I cannot support borrowing to knowingly default. We borrow to make money, we encourage responsible borrowing with the idea to strenghten ones credit and possibly make some money with it. We have been doing just that since 1996. I agree with borrowing to deduct interest. Besides mortgage interest any interest paid for the purposes of making money is deductable, i.e. margin interest on your investments. www.creditsense.com
Oops, keepmine, I agree with you that lenders expect to get paid, and in a perfect world, all of them would. But it is a fact of life that not all people are going to pay their debts. This is a risk that is calculated in the business model. I also agree, that you can't tell which accounts will pay and which won't, although the longer the debt is delinquent, the less the chances of collecting anything. Now as far as some of the SUBPRIME lenders going out of business, I think there is a certain segment of the population that needs these lenders in order to improve their credit rating. That being said, I also don't think it's going to be a huge loss for anyone if some of these folks go bye bye. I don't know too many people who are begging to pay 30% interest rates, several hundreds of dollars in set up fees, and huge annual fees. That's just my opinion though.
Collector, You're only 19 and work parttime. And, while you make decent money for your age and hours, you're not ready to borrow a lot of money for any reason. Pay your bills on time, put money in the bank, get your degree and a fulltime job. AT that point, when you need to buy a house or, finance a car, lenders will be more than receptive to you. With your present situation, what can a relationship with a bank's lending operation do for you? Lend you money you can't repay?
Keepmine, I understand the bank and the risk they would have giving me money. However, in my situation, they can clearly see I have no delinquincies in two years, I carry a fixed 5.75% card and I simply want to pay my credit cards off and pay as installment. Because they follow strict business models, they don't make many exceptions. Most 19 to 20 year old males don't even know what a credit score is. Even @ work, the kids I work with threaten people with "bad marks on your credit report" and "defaulted loan on your credit score" but they don't even know what it means. I'm not like them.
