From the BlogSubscribe Now

Financial Advice from a Bill Collector

This is a guest post from Rachel, a reader with experience as a collections agent. She graciously agreed to post some tips for dealing with your creditors when you’re having trouble paying your bills. Please treat her with kindness and respect, and check out her brand new blog, Whimsical Melange.


My experience is with auto collections, but most of my tips and information will apply to any simple interest loan.

Answer the Phone

You don’t want to talk to us. We aren’t surprised. The calls are not some sort of torture device (most of the time).

This is why you should answer the phone: We can’t call you back. Once you answer the phone and identify yourself as the account holder, we cannot call you back the same day according to the Fair Debt Collection Practices Act. If we do, please save the evidence. Sue the pants off the company. Easy way to get rid of debt!

Also, if you stay in contact with us, we won’t have to start tracing you. We start this immediately once we are unable to make contact. We have caller ID, so we’ll call you back on whatever number you called us from. We’ll call the references you listed on your application and try to reach you at your employer. If we still can’t reach you, we’ll call relatives you didn’t list and possibly even your neighbors to see if they know you. If you talk to us when we call, we have no reason to do this.

If you just can’t stand the collection calls, write a letter stating that you don’t want to be contacted by phone regarding your account, ever. Send it certified and keep the records. If you get another phone call, sue. Once you’ve sent a letter, though, the communications ball is in your court. We will not contact you for payment or to offer options to help you bring the account current. You’ll have to contact us, and when you do, we tend to be less flexible. After all, we haven’t heard from you – what do you expect?

Don’t Lie

You don’t have to give us all the gory details about why you can’t make your payment. I will ask you why you’re late because I have to meet certain guidelines on every call – keep your answer short and sweet. Hearing why you can’t make your payment isn’t my idea of a good time; if I need more information, I’ll ask. If you give me some long, complicated excuse, I may not believe you, but I’m likely to give you the benefit of the doubt. Don’t test my credibility. Anytime I catch you in a lie, I’ll make a note of it.

When you set up a payment arrangement, don’t break it. There will be a record on your account. If the notes on your account indicate dishonesty, we are more likely to take action early in your delinquency. If you’re upfront the whole time, it benefits you in the long run.

Know Your Fees

Most people buying a car will only face late fees if they can’t pay – make sure you know when this fee is assessed and how it is calculated. Some states require a flat fee; others allow a percentage. This information is readily available in the contract you signed when you took out the loan (in the fine print that you may or may not have read). Most of the people who get to me (more than 30 days past due) have never looked at their contracts.

If you’re leasing a vehicle, be prepared for a whole new world of fees. Sometimes the property taxes are assessed to the company providing financing, since they technically own the car. You have to pay it back. Also, if you get a parking ticket and don’t pay it, the finance company will have to pay that as well. They will pass it back to you along with additional fees for their trouble. Same thing with impound fees, which can go on your credit report as a repossession even if you’re not behind on your payments. You can argue about these types of fees until you’re blue in the face, but it will do you no good. They’re all in the lease agreement.

ANY Late Payment Costs You Money

If you make a late payment at the beginning of a loan, it really hurts you and you’ll pay more interest over the life of the loan. On the bright side, if you pay extra on your first few payments, you will greatly reduce the total amount of interest you pay. Make sure that any extra money you send will be applied to principle.

If you can’t make your payment, you may be able to get an extension. This extends the term of your loan by one month and allows you to “skip” a payment during the loan term. Instead of a 60-month loan, for example, you would now have a 61-month loan with only 60 payments required. This is a great way to catch up as long as you use it wisely. If you pay the interest owed on the date of the extension, you’ll be able to pay off your loan on time with minimal added interest.

DO NOT use an extension during the first 12 months of your loan. If you don’t pay the interest on the loan for 2 months, it could easily add up to the amount of your regular payment. Ouch! This is especially true for loans with high interest rates.

We Don’t Want Your Car Back (Most of the Time)

We would rather work with you to bring your payments current than take the car back, unless you’ve irritated us by lying to us. Your car is likely worth several thousand dollars more than you owe on it. Plus repossessions cost your finance company an average of $10k-$12k each. Obviously this is a bad business decision!

When you pay late, we make a ton of money. All we want to do is limit our risk. If you don’t irritate the collector assigned to your account, you’ll likely be able to keep your vehicle even with late payments.

If you know you absolutely can’t pay for your car, call us. Make arrangements to surrender the car voluntarily. It doesn’t look any better on your credit report, but it can save you about $500. Hiding the car is dumb. We’ll likely find it. If we can’t, a judge will order you to produce it. More of your money down the drain. All our court costs are passed to you, along with any fines imposed by the judge.

The Bottom Line

Keep in mind, you’re dealing with a person who has a job to do, which is to collect your money. Collection agents need to pay our bills just like you do. We have to follow policy even if they don’t agree with it. Be polite. Be honest. Don’t try to outsmart us. It will come back to haunt you.

Ask for the help you need. All we can do is say no. Don’t take it personally. We do not enjoy causing you pain or messing up your life.

Andrea’s note: I have not had pleasant experiences with bill collectors in the past. However, reading this post helps me understand their perspective a little better. Rachel has given us some ways to avoid being harassed by collection agents, as well some great tips on what to do if you’re having trouble making your loan payments. Did you learn anything new? Anything you still have questions about? Let us know!

About Andrea Whitmer

Andrea is a freelance web developer and mom trying to maintain a sense of humor in an otherwise chaotic world. She blogs in hopes of helping others avoid the same mistakes she made in the past. Join in the discussion here on So Over This, or connect on Twitter, Pinterest, Instagram, or Google Plus. You can also subscribe to new posts via RSS so you never miss out!


  1. Can I tell you about my recent experience with a bill collector? There is this man – William Warren – who calls for one of our hourly employees who works in another state. He calls and asks for her. I tell him she doesn't work here, that we are a business, and he is no longer to try to contact her in our office. He says, "Okay, I will keep calling." One day, he called 17 times in a row. We've told him he's in violation of the Fair Debt Collection Practices Act (Another ding – at one point he pretended to work for the state.), and he seriously said, "I don't care about the rules" and started laughing.

    When we looked up ways to report debt collectors, there are a lot of options for the debt-holder. Not much out there for businesses who are being harassed because of their employees' debt.

    I just wanted to share my story because not all collection agencies give a rat's behind if they're violating FDCPA. Not all of them are as law-abiding (and seemingly reasonable) as Rachel here.

    • When I scheduled this post, I had a feeling you might share this story. 🙂

      And that's fine, because the way that guy is harassing you all is bullshit. I would send him a certified cease and desist letter – at least that way you guys can sue if he keeps calling. If your company has an attorney, it would probably look better coming from him or her.

      I would also contact the other office and let the employee know that she needs to get her crap straightened out.

    • I have a couple of questions and a couple of possible solutions for you. When the crazy guy, I mean collector ( he really is crazy though fyi), calls you does he give you the whole "this call may be monitored for quality assurance" speech? Also, what state are you in? If you're in MA or CT, those states are super consumer friendly, and you can probably take whatever collection agency he's working for for a lot of money. So if he's saying the whole "this call may be recorded" speech, immediately ask for his supervisor. He should also be willing to identify the company he works for as well. If he doesn't record that information. Note every time he calls. Keep phone records. It is illegal to misrepresent yourself in any way when collecting a debt. My guess is that he isn't saying the whole call recording speech. He would have lost his job already if they were. So continue above mentioned steps about carefully noting each call. Next time he calls tell him you will be recording the call for your attorney. He will likely hang up immediately. I would actually record the call, but that is up to you. The cease and desist letter is also a great idea. I'm pretty sure this guy is a "skip agent". Basically he calls from unmonitored phones to try to reach customers who have bailed out on debt. He is also really bad at his job. He's wasting his time calling there instead of looking for other avenues to contact your employee. He is also putting his company at risk for a lawsuit. Please keep records and submit them to an attorney. Get some operating capital for yours out of this. This is the kind of thing that makes me so glad I no longer do personal collections.

  2. Of the one debt collector that I've actually kept communication with and worked out a payment plan, things have been nothing but pleasant. Seriously. As long as you're willing to work with them, they can be nice people. However, now CapOne took the account back from the collector, and I'm not sure how pleasant CapOne folks are 😀

    • I had a great relationship with CapOne until I included them in my bankruptcy. I didn't have a choice – you can't pick and choose what creditors are included. But they took it personally and wouldn't deal with me for a long time. My car is now financed through them, though, and I've had a good experience this time around. I just try not to piss them off.

  3. Ive had one recently that was calling my mom, in-laws then finally me. Saying the had court papers to serve me and would I be home/ They were coming out in hours and only way to stop them was to call a number with my case #. Never saying what its about. Did some backward tracing on the number they gave me (of course calling number is blocked) and found it to be a debt collection agency. Go through this every couple months.

    Checked my credit report and can't find what it would be about either.

    • That's a scam – when you call the number, they ask for your SSN and all kinds of other info to "verify" your identity. My grandfather fell for that one a couple years ago. Luckily he figured it out and put freezes on all his credit reports.

    • Definitely a scam. Tell them to come by your home. You'll be there at x time. They won't show up to serve you.

  4. My only experience with a debt collector trying to collect debt from me was after I closed a bank account. The bank later reopened it without telling me, because someone I'd authorized to debit my account for a 1x charge debited it a second time in error.  Then the bank sent me to collections. 

    When I called back the number left by the robocall, the people I talked to were extremely rude. (Probably because they're used to people saying they don't know anything about the debt, etc. I really hadn't received any notices, and had no idea what they were talking about.) Luckily, I knew that I had the right to have information about the debt sent to me, and knew to write them to ask them not to contact me any longer. And I did eventually reach someone at the bank (instead of the collections agency), and got the merchant to send back the money they'd erroneously debited from my closed account. So all ended well. 

    But I think there are a lot of jaded collectors out there, because there are probably a lot of people out there making things up. At a previous job, I sometimes sat with collectors to help try to collect money owed the company I worked for. Some of the things people said were almost laughable.  Some, of course, really wanted to get things worked out. They did get further. 

    • That's a good point – I can only imagine how much crap collectors hear all day. I'd probably be kind of irritable after a few hours, so doing it 5 days a week must be infuriating! Still, I can see why the rudeness would be hard for people who aren't used to dealing with collections.

  5. Great post, Rachel, and it's neat to see this after seeing comments on another post where Andrea asked you for the guest-post.

    So, what do you do if you have no way to make the minimums the company is asking for? (been there, done that) And what if they've literally tripled the original debt with add-ons and fees? Is there any way to get that reduced without paying the lump-sum they ask for "You can take care of this by paying 3/4 of the debt in a one-time payment…" yeah, if I could do that, I would be making the minimums, duh. :-p

    Thanks so much for a great post with lots of practical information.

Join the Discussion!