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Advice from a Former Debt Collector

Advice from a Former Debt Collector
Debt collector with bat smoking cigar

The day I graduated, along with my diploma, I was given the realization that the next couple decades of my life would be spent trying to dig my way out of a massive financial hole. I had $15,000 in credit card debt and nearly $45,000 in student loans.

Although I graduated $60,000 in debt, I started college without a single credit card, personal loan or car loan.

In my sophomore year of college, I got a job as a credit card debt collector for National City Bank, now part of PNC. My days were spent on an auto-dialer trying to convince people with hardly $100 to their name to pay an insignificant amount of their delinquent credit card balance.

One day, on my lunch break, I went with a co-worker to the bank branch inside the call center to open up my very first credit card. It was almost a rite of passage to open up a credit card while working at the bank.

Since I was in college and didn’t make a lot of money, I had no idea how to manage my finances. At times, I was holding three part-time jobs just to make minimum payments, which had quickly risen above my monthly rent payment.

Being in debt without a stable income can be overwhelming and depressing, but you have options. Don’t throw caution to the wind or give up because you’re “broke.” You’re in college – it’s normal to be broke, but that doesn’t justify making bad financial decisions that will haunt you for decades. From my experience as both a debt collector and debtor while in college, here’s my advice to current college students who are dealing with credit card debt.

Don’t Avoid Collectors

Relationships are all about communication. As odd and embarrassing as it is to think of having a relationship with a debt collector, avoiding them is the worst thing you can do. They’re paid to be annoying bounty hunters trying to collect $50 a phone call.

As a debt collector, I was required to call a delinquent card holder I hadn’t had recent contact with once a day. If I didn’t establish contact, we were to reach out to their place of employment. If still no contact was made, it was time to call their relatives. If relatives couldn’t be contacted, we had information on all of their neighbors and would call them. Some collectors even went as far as calling bars and bowling alleys that cardholders frequently visited. It isn’t something I enjoyed, but it was a required part of the job.

Answer when they call, keep records of information and give them as much information as possible on when you plan to pay.

Avoid Settlements

Settling sounds so harmless, but is it really the right decision to make if delinquent on credit cards?

If you’re 5-6 months delinquent on your credit card, you may be offered a settlement. For a portion of what you owe, the bank will accept a lump sum payment and mark your account as being settled. There are benefits to getting these debt collectors off of your back by settling, but there are risks involved as well.

Settling will damage your credit. The hit you’ll take won’t be as bad as completely refusing to pay, but it’s not as beneficial as repaying the full amount. After settling, the amount of your balance you didn’t pay is considered a forgiven amount. You will be taxed on this forgiven amount in the year you settle on the debt.


If you do settle, get everything in writing and keep multiple copies of documents. Always request the offer in writing before sending a check. There have been many instances where settlement amounts have been applied to the balance, but because of an error or an intentional act on the part of the debt collector, the rest of the debt is still owed in full.

If there is one thing to avoid in this process, it’s debt settlement companies. Many market themselves as nonprofits looking to help debt holders settle their debt. In reality, they often send cease and desist letters to your creditors to keep them from contacting you, and they now act on your behalf. They will then work to settle with the bank for pennies on the dollar, but you may still be charged at a much higher rate. If you’re considering a settlement, it’s better to work directly with the bank.

Ask Questions

Information is your best tool when tackling credit card debt, so find out everything you can. Different institutions have different requirements and programs they may be able to offer. While working as a debt collector, we had programs to offer, but the cardholder had to ask about options and programs in order for us to offer them.


I avoided even looking at my statements when I was in debt. Hiding from it is a good way to let the damage continue to build up. Come up with a plan to attack your debt. The first thing I did when I decided to tackle my debt was to tape every credit card statement to the wall. I wanted them where I could see them. This helped to keep me focused on paying them off.

What to Do Today

If You’re Delinquent on Payments

This is the last thing you want to hear, but you need to budget. Figure out what you need every month to survive, eat and keep a roof over your head. Compare this to your after-tax income each month. Do you make enough to get caught up on your payments? Are you falling short each month?

If there are ways you can increase your income without falling behind in school, consider picking up additional hours at work or getting another part-time job. If working more isn’t an option and your monthly income doesn’t allow you to pay the minimums on your credit card, it’s time to pick up the phone and talk to your bank. Explain your situation, what you do have to pay, and ask if they have any programs that may help you.

If in Debt, but Current on Payments

Debt sucks. Sure, you’re current on your credit cards, but it feels like this will never go away. If you’re motivated to get rid of this debt, which you probably are if you’re reading this article, you also need to budget! Unless you absolutely need all discretionary income to save for next semester’s tuition bill or something more important, channel all of your excess cash into getting rid of your credit card debt. Find out how much you have to pay each month, and create a strict budget to make sure you’re getting rid of your debt as quickly as possible.

What Helped Me?

My brother urged me for four years to read Dave Ramsey’s Total Money Makeover. I really didn’t want to read the book, but it was the best investment of time I ever made in my financial future. I learned why I desperately needed to pay off my debt as quick as possible, and baby steps on how to do it.

There are a lot of resources out there, but you need to find what works for you. The most important thing you can do is to take an active approach and not hide from your debt. You’ll have to face it someday, why not start today?


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