One morning I switched my phone into Do Not Disturb mode, and kept it that way for two years.
At that point I had many unheard voicemails. I’d stopped listening to them because they all said the same thing: I owed money.
Six months earlier, I lost my job and emptied my savings to make rent. For the first time in my life, I missed the minimum payments on my credit cards.
I told myself it would just be one time; that I’d get back on my feet fast. But one time turned into two times, and two times turned into four times. By the time I got a new gig, the amount I owed in late payments would swallow my next two paychecks. And I needed those paychecks for basic living expenses.
The struggle to survive muted any sense of moral obligation I once had to clear my name with creditors. Living in default was my new normal.
The early voicemails were upbeat, from chipper, mildly-manic sounding women. They gave me the benefit of the doubt: presuming I’d switched banks and forgotten to update my auto-pay.
But after months of not returning their calls, I began hearing from a different kind of caller. Male for one thing. Agitated for another. Their calls never started with a hi or hello; just my first name, over-enunciated, followed by an intimidating invitation to call them back.
Eventually, one caller let me know my debt had gone into collections.
The #1 Misconception About Debt Collection
Like most people who end up on a debt collectors call list, I didn’t answer those calls because I didn’t have the money. At least I thought I didn’t.
I assumed that if I wanted the calls to stop, I would have to come up with the full amount I owed.
I’d picked up three new gigs to make ends meet, but pulling in the extra $4,000 I would need to settle my debt felt impossible. So I kept ignoring the calls.
For a brief time, my ostrich strategy seemed to work.
A year after my debt went into collection, my credit score jumped by 50 points. The collection had rolled off of my credit report. I thought they’d given up on me and turned their attention to bigger, more delinquent fish.
Unfortunately, debt collectors never forget. Not without conditions.
Three months later –as I was applying for an apartment lease– my credit score plummeted again. The debt was back on my credit report. A debt buyer had purchased the rights to my debt, meaning it was dangerously close to litigation.
I knew I had to do something this time.
While researching solutions, I discovered I could clear my debt for far less than I owed.
The Silver Lining to Debt Settlement
Learning that your debt has gone into collections is terrifying and paralyzing. It’s hard to imagine any collector being kind after you’ve failed to meet your financial commitments.
What most of us don’t know is that there’s two advantages you gain when your debt goes into collections:
- You can pay it off for less than you owe.
- You can make payments over an extended period of time.
It sounds too good to be true, but it’s common practice for collectors to settle debts for less than what you owe. That’s because most lenders know that only 1 out of every 5 accounts that goes unpaid for more than 90 days will ever get back on track.
Knowing these odds, collectors are willing to take something over nothing. This is why they will often settle with you for 20-50% of what you actually owe.
If you can pull together a lump sum to cover that percentage, you will often save the most.
If you don’t have a lump sum to work with, you can take advantage of the second silver lining to debt settlement: payment flexibility.
Major creditors usually offer no more than 90 days to settle your debt in the early part of your delinquency. But once your creditor charges off your debt and sends it to collections, most collectors can offer longer payment plans. Sometimes up to 48 months.
How to Choose the Best Debt Settlement Company
When I finally faced my financial reality and trekked through the mountain of voicemails, I discovered just as many messages from debt settlement companies as I did from debt collectors. Out of desperation, I set up calls with a few of them.
Ironically, the debt settlement guys were as pushy as the debt collectors. They were brazen and overconfident, dismissing my concerns and exasperated by my questions.
What was most unsettling was their sales tactics. They insisted I sign a 12-month retainer contract before they shared their “proprietary” strategies. Those retainer agreements made no guarantees they could actually resolve my debt.
I chose to work with Michael Bovee and the Consumer Recovery Network through my own research, and trust.
Michael’s website (the one you’re reading now) was full of articles detailing common collection practices, and what I could expect from my specific debt holder. He even offered coaching on how to settle your debt yourself.
On our free consultation call, he took the time to understand the big picture of my finances and was comfortingly candid about my situation.
What I appreciated most was his honest and straightforward payment terms. He doesn’t get paid unless he executes a settlement agreement between you and your collector. His compensation is based on a percentage of what he saves you, not a percentage of what I owed, and there was no upfront fee.
This is how you know you’ve found a reputable person to help settle your debt.
My Debt Settlement Results
Within five days of our first call, Michael brought me a settlement offer approved by my debt buyer.
I settled the debt for 45% of what I originally owed, which I was fortunate to have upfront from two temporary gigs.
Thanks to Michael’s expertise, the debt collection vanished from my credit report after two months. It would have otherwise taken seven years to roll off.
One month after my debt settlement, my credit score jumped 30 points. Over the next year, it would rise by another 50 points with no other drastic measures other than paying my other bills on time.
To be candid, I’m still repairing my credit. My credit utilization remains well above the healthy 30% range, and I’m still making hardship payments on four other credit cards.
But this one settlement has restored my peace of mind and given me my life back.
I no longer worry about losing housing because of my credit score. I no longer hold my breath when I check my mail, dreading that this might be the day I’m served a letter from a debt litigator. And my phone no longer lives in Do Not Disturb mode.