The FDIC wants to get out of debt as badly as you do.
CNN estimates the FDIC incurred $45.4 billion in debt when it took over failing banks in 2008-09. Now, to alleviate this burden, it is selling portions of this debt to third parties.
Bill Bartmann , debt expert and creator of America’s largest debt-buying and debt-collection company, estimates that more than $4 billion in distressed assets have been distributed by the FDIC to the collection industry. In addition, banks such as Chase (Stock Quote: JPM), General Electric (Stock Quote: GE), Bank of America (Stock Quote: BAC) and HSBC (Stock Quote: HBC) have sold off more than $8 billion in consumer paper. The resulting influx of debt collectors means that those among us who actually owe the money may need a refresher course for dealing with these unpleasant phone calls.
Here are some simple rules to follow when the debt collector calls:
Rule #1: Call them back.
Stop ignoring those calls, because no, they’re not going away. In fact, a better course of action, Bartmann suggests, is to get in touch with collectors first. “All creditors have a number on the back of their monthly statement,” he explains, “If you know you are going to be unable to pay when due, call them and explain your circumstances. They will be impressed and amazed with your integrity.”
Rule #2: Be honest.
If you can’t pay, let them know. Granted, you should avoid a long-winded and highly unnecessary sob story. Debt collectors don’t care about your mother’s brother’s cousin’s dog’s emergency vet visit and they are not are going to believe that you are in Finland.
“You aren’t trying to beat the creditor out of the money,” Bartmann says. “You simply are unable to pay the full amount at the present time.”