Toronto: Carswell, 1981. 563 pp.. Hard Cover. Very Good. Ex-Library.

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Zombie debts are old debts that come back to life. They include old past debts that you did owe but were written off or discharged by bankruptcy, or debts that you never owed, such as debts incurred by identity theft

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Let’s face it, creditors loath trying to collect delinquent debt. It’s not so much the fact that the money is late. It’s because most creditors are not treated fairly by the majority of businesses in financial hardship. Debtors (most of whom “go it alone” in dealing with collectors) tend to ignore collection efforts, or they respond with false promises and misinformation. The false promises made to creditors erode credibility, and the only option creditors have in protecting their rights is litigation. It’s no wonder our court system is so clogged with cases.

Whether you “go it alone” or hire a professional debt management company, if you have overdue debt that needs resolution you will benefit greatly by making a strong effort to improve your credibility standing with creditors and/or collectors. Improving credibility will result in real concessions to you from creditors, creating more favorable repayment terms and further reductions in the amount creditors will accept to settle your debt.

Why is credibility so important?

Because debt negotiation is a relationship-driven activity. The quality of the “debtor-creditor” relationship between the debtor and the creditor drives the timeliness of communications, the exchange of payment and settlement offers, the exchange and review of financial information, the creditor’s perception of the debtor’s cash flow problems, the creditor/collector’s willingness to “go to the mat” with superiors to get reasonable offers considered, etc. Improved credibility can enable you to increase the quality of the debtor-creditor relationship by turning your creditors into allies, effectively getting creditors “on your side”.

Failing to improve a bad credibility perception will leave a debtor in a low priority position with creditors, and statistics show that in these situations debt negotiations will take longer, will be less meaningful, will produce less settlements, and will cost both parties more to administer. In addition, the settlements that do occur will be less favorable to you. This is because an insufficient relationship exists (post-debt) to drive an honest and reasonable settlement. In the debt management industry, this phenomenon is known as a “lack of momentum”.

How can bad credibility be repaired?

First, be honest and prompt with the creditor. Tell them that you have cash flow issues, and answer any reasonable questions from the creditor or collector honestly. Give them a firm date and time for you to update them, keeping them “in the loop” of your business activity, even if you have no current funds to pay. The boost in trust and respect in your relationship that you get from creditors by keeping these small promises is quite valuable, and many people overlook this.

Second, be ready to exchange detailed financial information with the creditor. If you want, offer to provide it up front, instead of being asked. The financials “back you up”, they give the creditor extra confidence in your position, and they give the credit negotiator “ammunition” to go to superiors for approvals. This further builds relationship momentum and allows adjusters to correctly code your file.

Third, have some meaningful information for a creditor each time you communicate so that a creditor will know that the settlement process is moving forward at all times, and that there is new information to discuss and consider. This helps prevent your file status from being recoded in the future for legal action, and your relationship with the creditor or collector remains as positive as possible.

Fourth, the interpersonal relationship between debtor and creditor is also important, so assign a new contact person from your business to communicate with the creditor to help eliminate the bad credibility of past actions or past contact people. This allows for a fresh start between the parties, with fresh, accurate information. This, in turn, equates to fresh creditor hope of a reasonable return on their collection attempts. Less lawsuits are filed, less wasteful communications occur, and the entire credit collection and credit reporting system becomes more efficient.

Fifth, make reasonable offers to the creditor based on supportable projections of future revenue and expenses, and be ready to talk about your receivables. However, don’t ever bind yourself individually on any business settlement, and don’t be bullied by a collector into a settlement you know cannot be funded. A debtor-creditor relationship is a give and take process, not a slugfest.

Sixth, produce and/or update your business website (including testimonials, if possible), so the creditor can be confident that it has a working relationship with a modern, ongoing business that has the capacity to make a reasonable settlement offer. Some creditors check debtor websites to verify addresses, phone numbers, and business status. Correctly matching information gives creditors more confidence.

Seventh, your relationship with your own business is also important, so keep your business legal structure current. Make sure your filings (corporate documents, taxes, permit fees) with the state in which the business is domiciled are current, paid and compliant with law. If the business’s filings with the government are lax, and if the business in turn loses it’s legal status, a creditor or collector who aquires this information may try to use it to their advantage.

In the end, successful credibility repair will help show creditors how your economic situation demands compromise and how reasonable your offers are, using standard business indicators that are easily understood. Your efforts to boost the debtor-creditor relationship status send a clear signal to creditors that you are acting responsibly and consider their interests important. Creditors will become more flexible and cooperative, and without their cooperation no solution can be had.

Christopher M. Lee
http://www.articlesbase.com/debt-consolidation-articles/improve-your-credibility-for-your-more-effective-debt-negotiation-112374.html

http://breakingnuz.blogspot.com/
Zombie debts are old debts that come back to life. They include old past debts that you did owe but were written off or discharged.
fair debt collection practices act

Duration : 58 sec

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Technorati Tags: zombie

ADOLPH. Uneasily I don’t know. You live with a woman for years, and you never stop to analyse her, or your relationship with her, and then–then you begin to think–and there you are!–Gustav, you are my friend. The only male friend I have. During this last week you have given me courage to live again. It is as if your own magnetism had been poured into me. Like a watchmaker, you have fixed the works in my head and wound up the spring again. Can’t you hear, yourself, how I think more clearly and speak more to the point? And to myself at least it seems as if my voice had recovered its ring.

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When a creditor listed on your credit report list a bad debt as being written off by the bank does it mean the obvious? Is that debt being written off as a loss to the bank? Please answer only if you work, or have knowledge in this field, or if this has happened to you. No guesses please.

A charge off or write off (pretty much same thing) is done for the creditors internal accounting procedures and does not release your obligation to pay a debt nor does it prohibit the creditor from further attempts to collect the debt, send the account to a collections agency, or sell it to a debt purchaser.

Debt forgiveness occurs when the creditor issues a 1099-c releasing the debtor from the debt and the creditor can no longer legally collect the debt. When a 1099-c is issued, the debtor must include the amount as income when filing their taxes except for primary residence home mortgages due to the Debt Forgiveness Act of 2007.