In this day and age, especially with the current recession, many people are laid off, fired, or in one simple term, unemployed. However, even though you're not earning any wages, it doesn't mean you don't have bills left to pay. It is often under these circumstances, where your earnings and your spending creates a negative number, that you are faced with phone calls and letters from collection agencies. Below is an advice of 8 steps to take when talking to a collections representative to see that both of you leave the conversation satisfied.

Step 1: Create a complete script for your entire conversation.
This script should include an opening line where you politely but firmly assure the representative that you are willing to work with them but that they are not to be rude or condescending.  Example: "Before you go any further, I need to tell you that I'm extremely willing to work with you. However, the moment you become threatening, aggressive, rude, or disrespectful, I will hang up and will not take another call from you. Can you agree to this?"

Step 2: Get all the information on the representative.
After the representative and you have both agreed to be civil and cooperative, now it's time to get their information. Tell them, politely but bluntly, "Now, before we start, I need to get your name, your company’s name, and a telephone number". This step is very important. If later on harassment happens, or any legal stance occurs not in your favor, you need to be able to produce the original agreement that this particular individual at his/her particular agency signed off with you. If for some reason a representative refuses to give you his/her information and claims that you are being uncooperative, stay calm and tell them once again that you are trying to be cooperative and that you are simply asking in return, for their cooperation*.

*Mark down this episode, name, date, time, and exactly what happened and save it for your records.

Step 3: Inform the representative that you will be taping your conversation.
The next line in your script now should inform the representative that you will also be recording the phone conversation. If they continue to talk after that, they basically gave you permission. (Make sure you tape yourself asking for permission).

Step 4: Request proof that you owe the debt.
Within the first five days that the agency contacted you (whether by phone or mail), they must send you a debt validation notice, which is a letter letting you know you have the right to dispute the validity of the debt within 30 days. If you don't dispute the debt within 30 days, the collector can assume it is valid. In order to dispute the debt, submit a written validation request. As soon as you do that, they cannot continue to try and collect the debt from you until the dispute is resolved.

• Send the written validation request - This request should state that you do not acknowledge that you owe this debt and that you must see proof or evidence of this debt in writing.
• Make sure you send this request certified mail with return receipt requested so they cannot say you never mailed it or they never received it.

Step 5: Verify the debt.
In response to your written validation request, the collection agency is required to send:

• proof that it owns or has been assigned the debt by the original creditor
• a copy of the original legal contract that you signed with your creditor
• documentation from original creditor which shows that you owe the debt

Review the document carefully. If they did demonstrate adequate proof of your debt, check your state's statue of limitation. Every state has different rules regarding how long you can go without paying a debt before the collections agency's right to collect through the court system expires. Because every state in the US has different rules and exceptions regarding when the time period officially begins, how long it lasts, and what can "revive" the statutory period, you must be careful and perhaps even consult legal counsel.

If you still owe the debt after review of statue of limitation, proceed to the next step.

However, if you do not feel that they have provided sufficient evidence, write another letter specifying that and also tell them that they are in violation of FDCPA and demanding that they cease collections efforts and alert the credit bureaus, or you will file a lawsuit. If they do not stop harassing you, then file a small claims suit in a courthouse in about two weeks. (See below for example of the letter).

Step 6: Mentally prepare a monthly/weekly payment amount that is realistically doable and can be carried out routinely.
Tell your collection representative the amount you can realistically pay and insist calmly that you are very willing and definitely desirous to resolve this debt, but this is the amount that you have and cannot possibly pay more. Be prepared that they will keep pushing for more money a month/week from what you gave them. But once again, calmly but assertively let them know that this is the only money you have and that you cannot pay more. Let them also know that if they agree to this amount, then in six months, you are willing to re-negotiate and see if you can increase your payment amount, at that time.

DO NOT LET THEM TAKE MONEY OUT OF YOUR CHECKING OUT BY ELECTRONIC FUNDS TRANSFER (EFT).

Step 7: Make sure they stop trying to collect interest on your debt.
When they agree to your payment, ask them to sign and fax you a note with your balance and the agreed-upon terms on it that you will then sign and fax back. Be sure to read the note over carefully before signing it, as this will be a legally (and certainly ethically) binding contract.

Step 8: No more calls.
Make sure they understand that once you both have signed the binding document agreeing on amount and balance of your debt, there are to be no more harassment phone call from their agency to you. The only phone calls that should be coming in from them are ones that return your calls.

Sample Debt Validation Letter

Date

Your Name Address City, State Zip

Debt Collector’s Name Address City, State Zip Re: Account Number

Dear Debt Collector:

I am writing in response to <phone call/letter> received from you on <date>. Pursuant to my rights under federal debt collection laws, I am requesting that you provide validation of this debt. Note this is not a refusal to pay, but a request that your offices provide me with evidence that I have a legal obligation to pay you.

You are hereby notified that if you do not comply with this request, I will immediately file a complaint with the Federal Trade Commission and the [your state here] Attorney General’s office. Civil and criminal claims will be pursued.

Sincerely,

Your Name

Remember, your job, if you do owe debts, is to negate further harassment and to exercise your right as a consumer. Do not let the conversation or direction of this collection lie in the hands of the collection representative. Take control of all conversations. Be calm, polite, but assertive. You know your rights and you will exercise them.