When a debt collector calls, it can ruin your day. You probably know how much you owe and it's intimidating to think about paying it off all at once. Rather than ignore that call, try to negotiate a monthly payment option.
Picture: Lending Memo
As personal finance blog Three Thrifty Guys points out, most debt collectors are only interested in settling the account. Whether you pay it all at once or slowly over time doesn't make much of a difference to them. And, in fact, most are aware that you may not be able to pay it off all at once. However, you can negotiate some remarkably easy monthly payments. The site explains this from the perspective of a former debt collector:
Negotiate a sum with the collector to end the collections and clear your credit report. However, most debtors who pay, set up monthly payments through post-dated checks. As collectors, we had strict guidelines and discipline on this process to avoid misappropriating those funds. I set up payment arrangements as low as $US10 per month and we never called those debtors unless a check bounced. Some debtors asked us to call them on a certain day of each month and they made their payment. If you do not offer any payment, then expect to continue getting phone calls.
Not all debt collectors make it known up front that monthly payments are an option. Regardless of whether or not you're told directly, you can always ask if there are ways to pay off your debt over time. Usually it will be an option and, over the long term, it's much better for your credit if it gets paid off — even$10 at a time — than if you ignore that call.
How to Deal With a Debt Collector (Written by a Former Debt Collector) [Three Thrifty Guys]