Treat ‘em Mean, Keep ‘em Keen: Making Your Creditors Work for You

This is a guest post from Jonathan Leane from Master Your Card. Jonathan is a poor college student fighting to stay one step ahead of his loan repayments. Be sure to check out the site or subscribe to the RSS feed so you can learn to master your card.

It was but several years ago when I realized I’d hit financial rock bottom. I was drowning in debt, with no job and no career prospects on the horizon. But it didn’t take me long to realize the silver lining in my situation.

I was reminded of the end of the film Rocky V when a smug corporate jerk steps up to the infamous boxer and says, “C’mon, pug. Touch me, I’ll sue.” Rocky levels him with an uppercut, wipes his lip and cracks, “Sue me for what?”

Sure, I’d hit rock bottom but that made it all the easier for me to hold my ground while a rabid pack of creditors threatened to strong arm and sue me at every turn. After all, I had nothing for them to take.

If you find yourself in debt with no hope of escape and countless creditors hassling you every waking hour, know this: the only way to fight creditors is to get down in the trenches with them and fight dirty. Here are ten things you should know about how to make the creditors work for you:

1. Above all else, remember this one, absolute truth: You, not the creditors, hold all the cards. You have the upper hand. You have the money; they want it.

2. In my experience, I’ve found that most creditors will not pursue legal action against you to collect a debt. Regardless of what they tell you or how many lawyers they threaten to sick on you. The costs are oftentimes too prohibitive, especially if you have no real assets. They simply can’t get blood from a stone.

3. Skip the “debt consolidation loan” agencies. Many are frauds purely out to make a quick buck off of your desperate situation. And the honest ones provide very little in the way of services that you couldn’t otherwise handle yourself for free with a bit of research.

4. Devise a plan. Prioritize your most important debts, keeping tax, student loans and any other government debts on the very top of that list. Find any way you can to pay them.

5. Every debt is negotiable. Whatever they tell you they’re willing to settle for, cut that figure in half. This works especially well in cases where an older debt has been resold multiple times. Oftentimes, creditors will accept pennies on the dollar.

6. Never speak with creditors over the phone. Ever. Verbal promises aren’t worth the paper they’re (not) written on and they mean nothing in a court of law. Both sides will admit nothing and deny everything.

7. Send every correspondence to them via certified mail and save your postal receipts.

8. Save every correspondence they send to you. If possible, make digital backups in addition to hard, paper copies.

9. Every correspondence (and unanswered voicemail message) from creditors will be borderline hostile or aggressive. “Send us X dollars immediately or we’re confiscating your house, your stamp collection and your favorite goldfish, Bubbles.” Stand your ground and don’t be intimidated by such threats. Remember: you hold all the cards.

10. Know the Fair Credit Reporting Act (FCRA) inside and out. Sure, it reads like stereo instructions: dry and oftentimes confusing. But it is the consumer’s bible when dealing with creditors. It outlines everything they can legally do and say. And, in my experience, creditors very frequently violate the rules outlined in the FCRA. Use any such violations to your advantage.

And finally, stay strong. Creditors can smell weakness a mile away. Don’t be afraid to stick to your guns!

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Filed Under: Credit Cards

About the Author: Jeremy Vohwinkle is a Chartered Retirement Planning Counselor® and spent a few years working as a financial planner. Today, he helps people make the most of their money by writing about personal finance here and elsewhere on the web. Jeremy is also Coach at Adaptu and a regular contributor for other publications such as Intuit, and American Express. Be sure to follow Jeremy on Twitter or Google+.


Contrary to what is said up top, creditors will sue you for your debt. Capital One is notorious for doing this so be careful!


I've recently fallen into hardship because my husband lost his job after 25 years, and after working a new job for 1 month he had a quintuple bypass and was out of work for over two months. We have four children and have had no credit card debt prior to 8 months ago when this all started. Now we are inb debt over our heads. Our first action was to call creditors before we became default and some of them were willing to set up a payment plan. But one creditor refused and sent us a bill to pay in full within two weeks of us calling them. Now they have turned our account over to a lawyer who when asked to send their terms in writing have refused, so I haven't talk to them since. I may try again to see if they will send terms in the mail, but any advice would be appreciated.


Yeah, what you mention probably are right, the creditor would not simply hire a lawyer to sue you because it is too expensive. But unfortunately, if you are in asia, you will find out most of those well called " LEGAL" financial company will threaten you and Asia is not like europe or the state, even though we got threaten, we can't do anything. So probably, the best way is, just return your debt in time =D


OK, I always believe in being civil and polite (even if you're trying to rip them a new one). That's a great thing -- and paying back loans is also a very good, moral thing to do. But if you're at the point where angry, threatening people are calling you and such, then your credit rating is already shit -- especially if you're already in collection. The best thing to do is simply play back hardball and get them to settle for as low as possible. This will put you on the road back to being able to rebuild your credit (and peace of mind by not getting nasty calls) much quicker.
Don't worry about these guys making profit. If you're being chased by a debt collection agency, then the original company has already washed their hands of you -- they have already settled, sold the debt to another company. Debt collectors are evil, mean people (and if you are one, I feel no pity). They are brutal, and twist the truth. They are professionally trained to do this, and often have several years experience, so know just how to pull your strings.

The moral: Pay your bills on time, and politely apologize if you're late or can't pay the amount owed. Often times, a little phone call when you miss a payment can keep you out of trouble, and most companies can be pretty lenient if you're having financial difficulties. This can help prevent you from getting in collection to begin with.

Lazy Man
Lazy Man

I'm with Fathersez - simply pay your debt and move on.


Hi. I recently found your blog and have added it to my blogroll. If you would like to check out my blog, feel free. Keep up the good work.


I agree totally that you shouldn't worry too much about your creditors. You only need to pay them if it benefits you to do so (assuming they aren't friends or family members or something). If we are just talking about credit cards and whatnot, then it's hardball. They lent to you for one reason - to make money. If they don't make any money, it's their tears not yours.


Something does not sound right.

They are your creditors for a good reason. You owe them something and they are just as human as you are.

I would propose that a sincere approach would be a much better path to take than a "mean and dirty" approach.

Working Dollar
Working Dollar

"In my experience, I’ve found that most creditors will not pursue legal action against you to collect a debt. Regardless of what they tell you or how many lawyers they threaten to sick on you. The costs are oftentimes too prohibitive, especially if you have no real assets. They simply can’t get blood from a stone."

The above point (#2) is quite true. In fact, most credit companies are all bark and no bite. The most many of the major creditors will do is ruin your credit rating.

Also, if they call you with threats, record the call, and be sure and tell them you are recording the call - if they threaten you with anything and you get recorded, you can actually the recording and report them the FCC and you will get a nice heft check in the mail - its called being fined by the FCC for threatening a consumer.

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