In the “Karma’s a Bitch” department (or perhaps it’s the “As Ye Sow …” department, depending on your religious proclivities), I’m both a delinquent debtor as well as a wannabe collector of a debt owed to me. And I need advice for both situations.
Scenario #1: Choie the Debtor
At one desperately low point in my life (I’ll spare you the gruesome details) I couldn’t pay my cable TV fee after racking up about a few months in overdue bills from Time Warner, and thus they cut me off. A year later and still no TV, I’m earning a little more now and would be able to afford a basic cable subscription. According to Time Warner, the debt (ballooned to $300 with interest I guess) has been moved to a collection agency, so I need to deal with them.
I’ve read that some debts can be settled or negotiated. While $300 is unfeasible, thanks to a minor windfall of $150 a smaller amount could be doable to clear the debt.
So I need some tips on negotiating a settlement with a creditor. How does one go about it? Any advice on good strategies, if there are any? What should I say? Do I offer the $150 right off the bat, or should I start lower and hope I can get him/her to eventually agree to my $150 limit? And finally, I’m really afraid of making the call; I’m a very polite but staggeringly shy & timid person, and I worry that I’ll, like, start to cry if the collection agent is a meanie. Help!
Scenario #2: Choie the Sucker – I mean, Creditor
Long story that I’ll cut short: about nine years ago, a longtime close friend suckered me out of $1,500 pretending to be in serious financial trouble – like loan shark, leg-breaking trouble. I was young and trusting and bought the story, 'cause the friend was just stupid enough to go to a loan shark. Naturally months went by and she never paid me back, even with the incredibly easy payment schedule ($25 a month, no interest!) we had worked out in writing. Eventually she even claimed I never lent her the money at all. Charming, huh?
Back then I wasn’t quite as timid a mouse as I am now, and somehow I got up the nerve to take her to small claims court. I did everything by the book, sent all the required notices and whatnot, but she never showed up to court and thus I won by default.
Yay for me, right? Not so much. As anyone who’s been through the small claims system knows, collecting on these judgments is pretty rare. I made a few attempts, even going through a marshal to seek out and garnish FormerFriend’s wages, but FF hid fairly well and had other debts she owed (including the government for unpaid taxes), so garnishment wasn’t gonna work. I eventually stopped trying, mentally filing the judgment away for a rainy day and chalking the whole thing up to a very bitter lesson learned.
Well. Last month out of the blue, I received a letter from a collections attorney who, I guess, was trawling for old uncollected debts and discovered mine. The letter asked me to contact him, since he could possibly help me collect the debt (for a percentage-based fee I’d pay only upon collection).
Here’s where you guys come in. I haven’t called the lawyer back yet, ‘cause it just seems kinda dodgy. Anyone know anything about lawyers who basically seek out owed debts? Is this sort of solicitation even legal, or is it a scam? If it’s legit, and I truly wouldl pay NOTHING out of pocket, I think it might be worth it to me. If the lawyer’s successful in getting some portion of the judgment, his percentage may be exhorbitant – might be a substantial cut in the $1,500 award. But right now I’ve got nuttin’ and probably won’t ever get it on my own, so even if the lawyer gets 75% and I only get 25%, it’d still be a net gain. In fact, I think I’m allowed to tack on interest to the original award amount, so after nine years we could probably get something a little higher.
Hell, I’d be happy if I could garnish enough to pay my cable bill! That’d be kind of sweet. 
Thoughts?