Digging Out of Debt | Life of Debt Episode 3
They have your name, your number, and your credit card records. Debt collectors have a funny way of tracking you down and can take people to court. What can we do? For Lee Campbell, he can rely on keg colleague and college professor Peter Jaworski to magically appear and teach him a few tricks to negotiating with collectors over the phone. Watch as Peter guides Lee through the debt battlefield – you might learn a thing or two.
Check out the whole series!
Episode One: Brave New World (of Debt)
Episode Two: The Debt Luck Club
And these resources:
1) Ready for Zero (app): A very useful tool for anyone looking to manage debt that has gotten out of control
2) Plastic is King (graphic): Just how much debt are individual Americans racking up?
3) Credit Card Statistic (webpage): Get the hard facts about this topic so you know where you stand, and what to do
Peter Jaworski: The best thing to do is avoid bad debt. But if you’re in over your head already, then you need to learn to negotiate.
Lee Campbell: California area code. Auntie Gam Gam!
Suzie Graham: Hey Lee? Baby?
LC: Oh hi auntie!
S: Good, because this is Suzie from Prestigious Financial. I’m so happy to be speaking with Lee Campbell?
LC: Suzie. Again.
S: Happy New Year Lee! I’m calling to discuss a very important business matter.
LC: Yeah, I don’t have it.
S: You owe $3,427.13 on a Macy’s card.
LC: Oh, no, I don’t have 3,000 dollars!
S: Or we could take you to court, which would lead to your wages being garnished.
LC: Garnished wages!?
PJ: Yeah, garnishment of wages means that Prestigious Financial, they can get a court order to automatically deduct money from your account, every single month.
LC: Who are you!?
PJ: I’m Peter! Dude that party was off the hook!
PJ: You kids still say that, right?
LC: Wait, don’t I owe this money back to Macy’s?
S: You did, but Prestigious Financial purchased the debt.
LC: You purchased my debt? I’m sorry that doesn’t sound like a really good investment.
PJ: Actually, that can be a very lucrative thing. Collection agencies buy debt and they make a bet that they can sell it for more than what they bought it for.
LC: Oh, I need to get in on this! Could I buy my debt and make a profit?
S: Can you do something today about this issue?
PJ: Sometimes debt collection agencies, they’re willing to negotiate if -
PJ: I’m Peter! The little graphic over here should have told you that already.
LC: How about we make a deal?
S: A deal!?
PJ: So, if you owe 100 dollars in debt, that means they bought it for pennies on the dollar; they might be willing to eliminate that debt if you’ll pay just whatever they paid for it, plus a little bit more.
LC: 700 dollars to wipe my debt clean!
S: 700 is way too small, we could do something like, 2,500?
LC: …Let me rummage through my couch for some loose change. Excuse me. Susie, I’m really trying to work this out with you. Maybe I can do 1,100 if I sell my kidney on the black market.
S: Hmmm, okay.
PJ: Okay, have them put it in writing, and make sure that they remove it from your credit score.
LC: Okay, I’m going to send over my information to you.
S: Information? You’ve done this before?
LC: Happy New Year Suzie! I’m sure I’ll see you again on the debt battlefield.
PJ: And done!
PJ: That wasn’t so bad was it?
LC: No! Not at all!
PJ: Debt doesn’t have to be scary if you know what to do!
LC: Dude are you still here!?
PJ: Hi! Is this Suzie Graham?
S: Ah, yeah.
PJ: Suzie Graham, the one who owes $11,429.27 in student loan debt?
You know, the marketplace can seem like a scary place sometimes. It’s easy to take on a lot of debt, and sometimes people will try to collect that debt, aggressively. But did you see how he managed to negotiate a mutually agreeable agreement? That’s the beautiful thing about the market, two parties can come to an agreement through mutually cooperation. And everyone can, in the end, turn out happy. But you know sometimes people take on so much debt, that all that debt is just bad debt. When that happens to you, you need to learn to negotiate. Now we’ve got a program for you right here, we’ve got resources that you can check out, they’ll teach you the difference between good debt and bad debt; when it’s a good idea to take on debt, and when it’s a really bad idea to take on debt, and debt that should be avoided. We’ve also got some tips and tricks to help with your personal finance, to help you grow your wealth, and a number of other things as well. So check ‘em out!