Many of our Debt Settlement clients will notice an increase in collection activity from their creditors shortly after their enrollment. As we have discussed in previous blogs, this is a normal part of any settlement plan, and is part of the settlement process. Debt Settlement clients are unable to afford to make payments to their creditors, which results in the creditors escalating their efforts to recoup the debts.  

I think this is especially true given the current economic environment and the bank's balance sheets. Major banks like Bank of America, Chase, and Capital One are desperately trying to bring in revenue, and unfortunately this is impacting our clients. Chances are high we will have to deal with this for the next several years. We have experienced the largest recession since the Great Depression. It took years to create, and will take years to correct.  

Collection Calls:  

Creditors will call, period. Unfortunately, we can't stop this. You legally owe them the debt, and they want the money. The Fair Debt Collection Practices Act applies to secondary creditors like collection agencies, not primary creditors like Chase or Capital One. When the creditors call, be courteous; explain you hired a firm to help with your debt and to contact them. Don't be rude. Don't hang up. Don't yell or swear. It does not help your situation.  

Most of your Creditors Receive Notice:  

Bank of America, Citi, Wells Fargo, and American Express will not receive a Cease & Desist letter or a Power of Attorney. Based on information we have gathered, these particular creditors tend to escalate legal action when they receive notice from a third party agency. The rest of your creditors will receive notice of your enrollment in a Debt Settlement Plan. I know this may seem strange; however, it puts you in the BEST position to be successful.  

What Creditors Will Say: 

The people calling you from the creditors are paid to collect payments. They can and will say whatever they think it will take to get you to make a payment. Don't do it.  I went through this myself several years ago. It is embarrassing. Nobody wants to be in that position. Here are some of my favorites:  

  • "We don't work with settlement agencies." 
  • "We will only talk to you. We don't want anyone else involved." 
  • "We are gong to sue you unless you make your payment." 

The creditors do work with settlement agencies, whether they wait until a collection agency has it, or when they sell it on the debt market. It happens. They want you to think they don't, but they do.  

The creditor does not want anyone else involved because they have more power if it is only you. Why put yourself in a weaker position?  

Creditors can file a lawsuit against you. If they do, send in the litigation documents, and we will get you in touch with an attorney who can review the documents, prepare a response, and provide legal advice. Wouldn't you rather have access to an attorney as opposed to dealing with the creditors on your own?  

CareOne is here to help you, the creditors aren't. They are only in it for themselves.  

Bottom Line: 

  • Joining a Debt Settlement Plan was the right thing to do
  • Creditors are trying to collect payments from you
  • Working with our agency is better than facing the creditors on your own
  • Creditors tell you whatever they think it takes to scare and intimidate you, don't give in!
  • Talk to us. We are here to help

Related Posts

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I'm on a DSP, What happens if a Creditor is not willing to Settle?

Rob Taylor

Rob is a contributing writer for the Straight Talk on Debt blog. Rob has been in the business of helping people get out of debt for the past six years. He is a product manager with the CareOne team and focuses on making debt relief plans even better.