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How to Talk to a Debt Collector

NEW YORK ( MainStreet) -- If there's a list of people you never want to get a phone call from, debt collectors are probably toward the top. But if you get a call demanding payment of an unpaid debt, don't panic -- there are ways to deal with the situation that don't involve disconnecting your phone and fleeing town.

To find the best way to deal with this situation, we spoke to Bill Bartmann , a longtime debt collector who advocates for more responsible and ethical debt collection methods.

If you get the dreaded debt collector call, don't panic -- just keep your wits about you.

Gather information
"First, have the debt collector explicitly identify him or herself: Who they are, where they're calling from, why they're calling and the nature of the debt," he says. "You as a citizen have the right to ask these questions."

Doing so accomplishes two things. First, asking for his or her information establishes accountability in the event the collector becomes abusive in any way (and Bartmann also suggests asking if you can record the conversation -- even if you don't have a recording device, bluffing that you do is a good way to keep him or her honest). Secondly, you want to get information you may need to establish the nature of your debt and clear up misunderstandings.

"Determine if it is even your bill," he says. "It may be someone with a similar name, or it might be an identity theft crisis."

If you're at all unclear about the circumstances surrounding the debt , don't hesitate to get off the phone to gather further information. Don't be pressured into settling the debt or giving up financial information before you're ready.

Find a way to settle
If you establish you do indeed owe money, you'll need to find a way to pay it off. How much of the debt you actually need to pay off will depend on who owns it. If it's your original creditor (for instance, a bank), you have very little leeway; if, however, several months have elapsed and the bank decided to sell off the debt to a third party, you have a lot more wiggle room. Bartmann notes that in situations such as these, a creditor will sell the debt for as little as a nickel on the dollar. So even though the collection agency will likely ask you to pay the full debt, the truth is that they can get a fraction of the total amount and still turn a profit.

Let them know you're aware of this -- that you know they only paid five to seven cents on the dollar for your debt, and that they should be willing to settle.