A debt collector who will not negotiate is playing hardball while insisting on full payment of the debt. Debtors who refuse to be intimidated can often force debt collectors to settle for less than the full amount of the debt. Debt collectors usually earn money on commission, and the more they collect, the more they make. However, that also works to the debtor's advantage, because the debt collector will earn nothing if the debtor continues to refuse to pay. That's why holding out for a settlement is an excellent tactic when the debt collector refuses to negotiate. However, if the debt collector absolutely will not negotiate, the debtor must consider paying in full or face a possible civil lawsuit.
Contact
Debtors contacted by debt collectors should review their rights under the terms of the Fair Debt Collections Practices Act, which is a federal law. There is nothing in the law that requires debt collectors to negotiate, but it does prohibit them from using bullying tactics. The law also gives a debtor the right to demand that the debt collector end all phone calls and communicate with the debtor only in writing. Insisting on written communication can be helpful while dealing with a debt collector who will not negotiate. Debtors, especially those inexperienced in dealing with debt collectors, can use written communicate to better organize their thoughts and firmly insist that the debt collector accept a settlement offer.
Legal Action
Understanding how civil lawsuits work is also important if a debt collector will not negotiate. The threat of a lawsuit is the debt collector's most powerful weapon, but by law the debt collector must file the suit in the state and county in which the debtor lives. For an out-of-state debt collector, this usually means transferring the account to an attorney in the debtor's state. A lawsuit can lead to a court judgment and possible garnishment of the debtor's bank account and wages. However, without a lawsuit and court judgment, the debt collector simply cannot force the debtor to pay. Debtors determined to stand their ground can refuse to pay in full and change their stance only in the event of a lawsuit. That forces the debt collector to decide whether it is better to settle or pursue legal action.
State Statutes
Debtors should also review statute of limitation laws in their state. The statutes regulate how long debtors have to win a court judgment on various types of debts. Laws vary, but the average is about six years. After that, the debt collector cannot win a court judgment or garnishment orders if the debtor shows up for a court hearing and informs the judge that the debt is too old for consideration by the courts. Some debtors with especially old debts refuse to pay in full because they know the debt collector cannot win a lawsuit on the debt. Taking that position and making it clear can force debt collectors to negotiate. A local office of the state attorney general can provide information on debt statute of limitation laws.
State Statutes
SmartMoney reports that debt collectors often will settle for 20 to 70 percent of the balance on unsecured debts such as credit cards. Debtors dealing with a debt collector who will not negotiate should insist on a 20 percent settlement no matter what the debt collector says and keep increasing the offer over time, if necessary -- even if it takes months to convince the debt collector to negotiate.
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